FINRA Series 7

Category - Series 7

What rate of return takes into consideration appreciation or depreciation in market value relating to the par value of a debt security?
  1. current yield
  2. yield to maturity
  3. nominal yield
  4. basis yield
Explanation
Answer: B - yield to maturity. The premium or discount in the security price relative to par value is considered when computing the yield to maturity.
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