Which of the following does not influence the yield to maturity for a security?
A) Required real rate of return.
B) Risk free rate.
C) Business risk.
D) Historic yields.

Question

Quizplus · Accepted Answer

Historic yields may provide an indication of the average return on a security; however, they do not directly influence the yield to maturity. The yield to maturity is primarily determined by the security's coupon rate, current market price, time to maturity, and current interest rates. Factors such as required real rate of return, risk-free rate, and business risk all play a role in determining current interest rates, which in turn affect the yield to maturity.

Which of the Following Does Not Influence the Yield to Maturity