To determine: The current yield and expected
Coupon Rate:
The coupon rate refers to the rate at which interest is earned on the face value of a bond every year. This is the rate at which yield is funded from a fixed-income security.
Yield to Maturity:
The yield to maturity is the total yield or return, which is derived from a bond until the time of the maturity. For this, an assumption is made that the bond will be held until the maturity and would not be called.
Interest Rate Risk:
The interest rate risk is the risk, which is associated with a bond because of the fluctuations of the interest rate. The value of the bond differs with the change in the interest rate.
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Corporate Finance (The Mcgraw-hill/Irwin Series in Finance Insurance and Real Estate)
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