The change in the bond's price relative to the initial purchase price is
A) the current yield.
B) coupon payment.
C) yield to maturity.
D) rate of capital gain.

Question

Quizplus · Accepted Answer

The rate of capital gain is the change in the bond's price relative to the initial purchase price. Option A, current yield, is the bond's annual coupon payment divided by its current market price. Option B, coupon payment, is the fixed amount of interest paid by the bond issuer to the bondholder. Option C, yield to maturity, is the total return anticipated on a bond if held until it matures, including all interest and principal payments.

The Change in the Bond's Price Relative to the Initial