Suppose you look for a bond with a high yield and find one that currently has an annual YTM of 30%. What is your likely annual expected return to investing in this bond?

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Suppose you look for a bond with a high yield and find one that currently has an annual YTM of 30%.  What is your likely annual expected return to investing in this bond?

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Answer:

annual expected return to investing in this bond will be  30%

Explanation  to the above answer:

YTM (Yield to maturity) is the total return that is going to be anticipated on bond if it kept until maturity. It is long term bond Yield but generally  expressed as annual rate . We have provided in the question that that currently has an annual YTM of 30% so it mean that bond give annual expected return is 30% so the answer is annual expected return to investing in this bond will be  30%

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