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Yield to maturity (YTM) is the calculation utilizing the current price of the investment, the coupon cash flows and the par amount at maturity. However, the mathematics of the YTM calculation is virtually wrong or incorrect in the real world for coupon bonds greater than zero (non-zero coupon bonds). Which statement below best describes this incorrect math formula? (Points: 4)
Coupon payments every 6 months might be small and therefore, cannot be reinvested in an efficient manner.
Interest rates at the time of the coupon payments will not be identical to YTM rate calculated.
The dynamics of the real world markets and the supply and demand for borrowing and lending almost predict that rates will be different on the coupon dates than the YTM calculation assumes.
This is the best math formula we have; and universally accepted.
All of the above statements are correct.

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