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Sir,
Although you emphasized that redemption yield cannot be tested (numerically)
But how to calculate it? Is it the= current market value/(Total redemption $- market value)
Here since, the market value is $80 and the total redemption is $110 would it be =(80/110-80)=37.5%
Should the redemption yield be based on the Market value that when i bought or the market value at redemption rate.I certainly do NOT emphasise that the redemption yield cannot be tested!!!
It is tested often and is usually referred to as the return to investors.
Watch my lectures working through part (a) of example 8 in Chapter 17 of our free lecture notes.
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