The current yield of a bond is defined as the:
A)annual interest payment divided by the current price.
B)coupon rate.
C)present value divided by the face value.
D)current price divided by the annual interest payment of a bond.
E)yield-to-market divided by the current price.

Question

Quizplus · Accepted Answer

The current yield of a bond is calculated by dividing the annual interest payment by the current market price of the bond. This gives an indication of the return that an investor can expect to receive from the bond based on its current price.

The Current Yield of a Bond Is Defined as The