Generally, the coupon rate on a bond is ____ and the current yield is ____.
A) Fixed; fixed
B) Fixed; fluctuating
C) Fluctuating; fixed
D) Fluctuating; fluctuating
E) Fixed; equal to the coupon rate

Question

Quizplus · Accepted Answer

The coupon rate on a bond is fixed because it is determined at the time the bond is issued and does not change. The current yield fluctuates because it is calculated as the bond's annual interest payment divided by its current market price, which can vary over time.

Generally, the Coupon Rate on a Bond Is ____ and the Current