question archive The yield to maturity, current yield, and rate of return are a
The yield to maturity, current yield, and rate of return are a
Subject:FinancePrice:2.86 Bought3
The yield to maturity, current yield, and rate of return are
a. different only for bonds with higher maturities.
b. interchangeable measures of the same interest rate.
c. the same for all discount bonds, but not coupon bonds.
d. equal only for bonds traded at par value.
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The yield to maturity, current yield, and rate of return are equal only for bonds traded at par value.
Current Yield = Coupon / Current Price
YTM = Retun of Bond if held till marurity which is same as Rate of Returns
and is the Face value = Value of Bond, the current yield = YTM.
Option d is correct.
