The _______ method of bond valuation states that the intrinsic value of the bond is based on the discounted value of the cash flows that is expected to be received in the future from owning the bond.
A) capitalization of income
B) weighted-average
C) moving-average
D) price-earnings

Question

Quizplus · Accepted Answer

The capitalization of income method is the one that involves discounting expected future cash flows to determine the intrinsic value of the bond. The other methods listed (weighted-average, moving-average, price-earnings) are not relevant to bond valuation.

The _______ Method of Bond Valuation States That the Intrinsic