Which of the following is a form of calculating returns on bonds?

• A. Running/interest yield
• B. Gross redemption yield
• C. Bill rate
• D. Current yield

Answer: (C)

Bond returns are measured using yield concepts that relate income and price to the bond, or to the bond’s eventual redemption. Running yield (often called interest yield) shows the annual coupon income as a percentage of the current price, giving a quick sense of income relative to what you’d pay today. Gross redemption yield goes further by representing the total annual return you’d expect if you hold the bond to its redemption, accounting for coupons and the redemption value. Current yield is a similar idea, focusing on the annual coupon divided by the current price as a straightforward income measure.

A bill rate is tied to short‑term money market instruments like government bills, which use a different pricing approach (often a discount rate) and are not considered bonds. So bill rate isn’t a bond yield measure, while running yield, current yield, and gross redemption yield are.