The ________ is used to calculate the present value of a bond.
A. nominal yield
B. current yield
C. yield to maturity
D. yield to call
E. None of the options are correct.
C. yield to maturity
Yield to maturity is the discount rate used in the bond valuation formula. For callable bonds, yield to call is sometimes the more appropriate calculation for the investor (if interest rates are expected to decrease).
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