If the price of an existing bond increases,the current yield increases.

Name: If the price of an existing bond increases,the current yield increases.
Brand: Quizplus
Rating: 4.7 (33 reviews)

Question

Quizplus · Accepted Answer

When the price of an existing bond increases, the current yield decreases, as the yield is calculated by dividing the annual interest payment by the current market price of the bond. As the price goes up, the interest payment remains the same, resulting in a lower yield percentage.

If the Price of an Existing Bond Increases,the Current Yield