n NISM Certifications
XXI NISM Series XXI-A
Medium

The "Yield to Maturity" (YTM) of a bond is the:

Practice question from NISM XXI A for PMS - Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Annual coupon payment divided by current price

  2. Discount rate that equates the present value of all future cash flows to the current market price

    Correct answer

  3. C

    Face value of the bond

  4. D

    Interest rate paid periodically by the bond issuer

Why this is the answer

YTM is the internal rate of return of a bond.

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