Question

Which of the following describes the most significant technical difference between the Current Yield and the Yield to Maturity (YT

  • M  of a bond?
A Current Yield considers the time value of money, while YTM does not.
B YTM accounts for the reinvestment of coupon payments and capital gains/losses, whereas Current Yield only considers annual coupon income relative to the market price.
C Current Yield is a statutory measure mandated by SEBI, while YTM is an optional market measure.
D YTM is only used for Zero-Coupon Bonds, while Current Yield is used for all debt instruments.
E Current Yield is always higher than YTM for bonds trading at a discount.
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