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A short-term investor would more likely be interested in a bond's current yield rather than its...

A short-term investor would more likely be interested in a bond's current yield rather than its yield to maturity

True or False?

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Answer #1

A short-term investor would more likely be interested in a bond's current yield rather than its yield to maturity

This statement is true

Bond's current yield is like annual return on bond and calculated as

Bond's current yield = Annual Coupon payment / Market price of the bond

While bond’s yield to maturity is the return if the bold is hold till maturity

Therefore a short-term investor would more likely be interested in a bond's current yield rather than its yield to maturity

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