Yields are measures of the return on holding a bond. a. the yield to maturity is

Question

Yields are measures of the return on holding a bond. a. the yield to maturity is a measure of the interest rate on a bond. To compute it, set the price of the bond equal to the present value of the payment. b. The current yield on a bond equal to the coupon rate divided by the price. c. When the price of a bond is above its face value, the coupon rate is greater than the current yield, which is higher than the yield to maturity. d. One-year holding period returns are equal to the sum of the current yield and any capital gain or loss arising from a change in a bonds price.

Explanation / Answer

c

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