An annual interest payment divided by current price of bond is considered as_____________?
Correct answer: A. Current yield
- A. Current yield
- B. Maturity yield
- C. Return yield
- D. Earning yield
Explanation
Current yield measures the bond’s annual interest payment relative to its current market price, so it changes as the bond price changes. Yield to maturity is broader because it also includes the gain or loss up to maturity.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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