Correct Answer: ✅ Current Yield
Explanation:
* Current Yield = Annual Coupon / Current Market Price
*👉 It does NOT consider future cash flows, such as:
* Redemption (face) value at maturity
- Timing of cash flows (time value of money)
- Holding Period Return (HPR) ❌
- ✔️ Considers coupon income and price change during the holding period
- Yield to Maturity (YTM) ❌
- ✔️ Considers all future cash flows (coupons + face value) discounted to present value.
✅ Final Answer:
👉 Current Yield
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