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:

Probabilities

Measures of the likelihood that an event will occur, expressed as numbers between 0 and 1, where 1 denotes certainty.

Outcome

A possible result or effect of an action, situation, or experiment, which can be measured, observed, or evaluated.

Federal Holidays

Days recognized by the federal government of a country as non-working days in commemoration of specified events or celebrations.

Sample Space

The set of all possible outcomes or results of a random experiment.