What is the difference between the Yield-to-Maturity and the Realized Compound Yield?
A) They are actually the same concept.
B) The yield to maturity is the actual return, calculated at the end of the investment; the realized compound yield is the expected return at the beginning of the investment.
C) The realized compound yield is the actual return, calculated at the end of the investment; the yield to maturity is the expected return at the beginning of the investment.
D) The yield to maturity continues as far as the first call, the realized compound yield continues until final payment is made.

Question

What is the difference between the Yield-to-Maturity and the Realized Compound Yield? 
A) They are actually the same concept.
B) The yield to maturity is the actual return, calculated at the end of the investment; the realized compound yield is the expected return at the beginning of the investment.
C) The realized compound yield is the actual return, calculated at the end of the investment; the yield to maturity is the expected return at the beginning of the investment.
D) The yield to maturity continues as far as the first call, the realized compound yield continues until final payment is made.

Quizplus · Accepted Answer

The yield-to-maturity is the expected return at the beginning of the investment, while the realized compound yield is the actual return, calculated at the end of the investment. Therefore, they are not the same concept and option C is the correct choice. Option A is incorrect as they are not the same concept. Option B is also incorrect as it describes the opposite of what each yield represents. Option D is irrelevant and does not accurately describe the difference between the two yields.

What Is the Difference Between the Yield-To-Maturity and the Realized