Which of the following statements about the rate of return is NOT correct?
A) The total rate of return may be greater or less than the current yield.
B) The total rate of return may be greater or less than the rate of capital gain.
C) The total rate of return may never be negative.
D) The total rate of return is greater than the coupon, holding everything else constant.

Question

Quizplus · Accepted Answer

The total rate of return can be negative if the asset's price declines and the investor incurs a loss.

Which of the Following Statements About the Rate of Return