The annual coupon payment of a bond expressed as a percentage of its current market price is referred to as its:

(A) Coupon rate
(B) Current yield
(C) Yield to maturity
(D) Discount rate

The answer is: (B) Current yield
The current yield measures a bond’s annual coupon payment divided by its prevailing market price. It reflects the bond’s income return relative to what investors pay in the market.