Which of the following statements regarding a $1,000 corporate 8.50% bond offered at 110 is TRUE?
A) The bond's current yield is calculated by dividing its annual interest by its market price.
B) The bond's current yield is lower than its yield to maturity.
C) To determine the bond's current yield, its stated rate must be compared against other fixed-rate investments in the client's portfolio.
D) The bond is a discount bond.
Answer: A) The bond's current yield is calculated by dividing its annual interest by its market price.