Series 7 Exam Question 25: Answer and Explanation

Question: 25

Which of the following is the only yield found on the indenture of a bond?

• A. Nominal yield
• B. Current yield
• C. Yield to call
• D. Yield to maturity

Correct Answer: A

Explanation:

A. The only yield found in the indenture of a bond is the nominal yield, which is also known as the coupon rate. The reason that the current yield, yield to maturity, and/or yield to call can't be in the indenture is because all of them change as the market price changes.