Intrinsic bond value refers to the bond's
A) net present value.
B) "true" value.
C) internal rate of return.
D) promised yield to maturity.

Question

Quizplus · Accepted Answer

Intrinsic bond value refers to the bond's "true" value, which is independent of the market price or yield. It is essentially the present value of the bond's expected cash flows, discounted at the appropriate rate. It is different from the promised yield to maturity or internal rate of return, which is based on assumptions about the future behavior of interest rates and reinvestment of cash flows. The net present value is a more general concept and applies to any type of investment or cash flow stream.

Intrinsic Bond Value Refers to the Bond's