The Current Yield of a Bond Can Be Calculated By

question 8

Multiple Choice

The current yield of a bond can be calculated by:

• A) multiplying the price by the coupon rate.
• B) dividing the price by the annual coupon payments.
• C) dividing the price by the par value.
• D) dividing the annual coupon payments by the price.

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Definitions:

Cash Dividend

A payment made by a company out of its profits to its shareholders, usually in the form of cash.

Systematic View

An approach that involves a structured, methodical analysis of a problem, situation, or system.

Events

Occurrences or happenings, often of significance, that are scheduled or observed.

Situations

Sets of conditions or circumstances at a certain time and place.