The total rate of return is equal to the
A) sum of the coupon rate and the current yield.
B) yield to maturity.
C) sum of the current yield and the actual rate of capital gain or loss.
D) sum of the current yield and the expected rate of capital gain.

Question

Quizplus · Accepted Answer

The total rate of return is the sum of the current yield and the actual rate of capital gain or loss. The coupon rate and yield to maturity only factor in the income generated from the bond, while the expected rate of capital gain in option D is subjective and not guaranteed.

The Total Rate of Return Is Equal to the