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The annual interest paid on a bond relative to its prevailing market price is called its...

The annual interest paid on a bond relative to its prevailing market price is called its a. Yield to maturity. b. Coupon rate. c. Promised yield. d. Current yield. e. Effective yield.

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Answer #1

Current yield is called as an annual interest paid on a bond relative to its prevailing market price

Answer is Option d) Current Yield.

Yield to maturity is - Rate of return the investor expects to earn an annualized rate.

Copuon rate is - the Interest paid on the bond as a fixed payment periodically.

Promised yield is - It is the yield promised to the bond holder on the assumption that the bond is held til maturity, with all coupon payments as promised.

Effective yeild is - Total yeild an investor receives from a bond.

Answer is Option d)

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