All else constant,as the market price of a bond increases the current yield _____ and the yield to maturity _____

Question

Quizplus · Accepted Answer

As the market price of a bond increases, the current yield decreases because the current yield is calculated as the annual coupon payment divided by the market price. Similarly, the yield to maturity decreases because it reflects the total return anticipated on a bond if held until it matures, which inversely relates to the bond's price.

All Else Constant,as the Market Price of a Bond Increases