$1,000 par value zero coupon bonds, ignore liquidity premiums
-The __________ of a bond is computed as the ratio of coupon payments to market price.

Question

$1,000 par value zero coupon bonds, ignore liquidity premiums 
-The __________ of a bond is computed as the ratio of coupon payments to market price.

Quizplus · Accepted Answer

The ratio of coupon payments to market price is the definition of the current yield. Nominal yield refers to the coupon rate, while yield to maturity and yield to call are both yield measures that take into account the bond's price and its future cash flows. However, neither of these measures specifically calculates the ratio of coupon payments to market price.

$1,000 Par Value Zero Coupon Bonds, Ignore Liquidity Premiums