Which of the following constitutes a violation of the MSRB's advertising rule?

The correct answer, focusing on the violation of the MSRB's advertising rule, is the failure to indicate the gross yield for discount bonds. The MSRB (Municipal Securities Rulemaking Board) sets forth rules to ensure that advertisements related to municipal securities are not misleading and provide clear information to potential investors.

When discount bonds are advertised, it is important to indicate the gross yield because this figure represents the total return the investor can expect, which encompasses both the purchase price and the interest payments. By not providing this information, the advertisement could lead to misunderstandings regarding the potential profitability of the investment, therefore failing to satisfy the MSRB's requirement for transparency and full disclosure.

The other options relate to practices that may not clearly violate the MSRB's advertising standards. While including only current yield in advertisements may provide incomplete information, it is permissible as long as it is not misleading on its own. Advertising non-inventory bonds typically doesn’t violate any specific rule as long as the advertising is in compliance with other relevant regulations. Percentages without specifying coupon or yield raises concerns as it might create ambiguity; however, it depends on the context in which it is presented. Thus, option C clearly represents a direct violation of the clarity and transparency that the MSRB