For an investor who plans to purchase a bond maturing in one year, the primary consideration should be

Question

Quizplus · Accepted Answer

For an investor purchasing a bond maturing in one year, the primary consideration should be the yield to maturity. This is because the yield to maturity reflects the total return the investor will earn on the investment, including both the interest income and any potential capital gains or losses. Interest rate risk, changes in the risk of the issue, and the coupon rate are also important factors to consider, but they are secondary to the yield to maturity for a one-year bond.

For an Investor Who Plans to Purchase a Bond Maturing