Anum Hussain AFM 371 Tuesday, January 03, 2012
• Rate of return on bonds is the YTM.
• The cost of issuing a bond is also YTM.
• Rate of return for bondholder = cost of issuing bond for bond seller.
• Shareholders require a higher rate of return than bondholders because stocks are more
• CAPM compares your expected rate of return to the risk that you’re taking.
• CAPM is most used to work