The Current Yield Tends to Understate a Bond's Total Return

question 68

Multiple Choice

The current yield tends to understate a bond's total return when the bond sells for a discount because:

• A) increases in interest rates will increase the current yield.
• B) the bond's price will increase each year.
• C) current yields show only nominal returns.
• D) the bond may have a higher face value.

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Definitions:

Extinction Rates

The speed at which species become extinct over a certain period of time, often accelerated by human activities.

Resource Partitioning

A concept in ecology where species adapt to compete less directly for environmental resources, often by specializing in different niches or times for activity.

Predators

Organisms that hunt and feed on other organisms for survival.

Native Species

Organisms that are naturally occurring in a region or habitat without human intervention, adapted to local environmental conditions over time.