alleryStart learning →To actually earn the quoted YTM, what must the investor do with each coupon received?
ASpend it straight away
BLeave it uninvested
CReinvest it at the YTM
DReinvest at coupon rate
Answer & Solution
Correct answer: C. Reinvest it at the YTM
YTM is an internal rate of return that assumes every coupon is reinvested at the YTM itself until maturity.
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