Unless otherwise indicated, when economists or investors refer to the interest rate on a financial asset, they referring to the:
A)current yield
B)coupon rate
C)yield to maturity
D)prime rate

Question

Quizplus · Accepted Answer

Yield to maturity is the total return anticipated on a bond if the bond is held until it matures. It takes into account the current market price of the bond, its face value, the coupon rate, and the time to maturity. This is generally the interest rate that investors focus on when evaluating the return on a fixed-income investment like a bond. The other options (current yield, coupon rate, prime rate) may also be relevant in certain contexts, but they do not provide a comprehensive measure of the return on a financial asset.

Unless Otherwise Indicated, When Economists or Investors Refer to the Interest