A frequently used approximation for the yield to maturity on a long-term bond is the
A) coupon rate.
B) current yield.
C) cash flow interest rate.
D) real interest rate.

Question

Quizplus · Accepted Answer

The current yield is a frequently used approximation for the yield to maturity on a long-term bond because it is calculated by dividing the annual interest payment by the bond's current market price, providing a quick estimate of the return an investor might expect.

A Frequently Used Approximation for the Yield to Maturity on a Long-Term