Which of the Following Are True for the Current Yield

question 76

Multiple Choice

Which of the following are true for the current yield?

• A) The current yield is defined as the yearly coupon payment divided by the price of the security.
• B) The current yield and the yield to maturity always move together.
• C) The formula for the current yield is identical to the formula describing the yield to maturity for a discount bond.
• D) All of the above are true.
• E) Only A and B of the above are true.

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Definitions:

Exclusivity Pricing Strategy

A pricing method where high prices are set due to the unique or exclusive nature of a product, targeting a specific segment of the market.

Cost Plus Pricing

A pricing strategy where a fixed percentage or amount is added to the cost of producing a product to determine its sale price.

Parallel Market

An unofficial market where goods are traded outside of the official channels, often at a different price point.

Dumping Strategy

A practice where companies sell products in foreign markets at prices lower than those in their domestic market, often to increase market share or unload surplus inventory.