(Q3 IN TYPE B) WHAT IS THE CURRENT YIELD OF THE FOLLOWING BOND

Question

13. (Q3 in Type B) What is the current yield of the following bond: it has 10 years until maturity, sells for $1033, has a face value of $1000 and a 6% coupon rate (paid semi-annually). A) 2.39% B) 4.78%  C) 5.81%  D) 11.62% Solution: B Current Yield = Annual coupon / Current price = $60/$1033 = 5.81%

Answer

13. (Q3 in Type B) What is the current yield of the following bond: it has 10 years until maturity, sells for $1033, has a face value of $1000 and a 6% coupon rate (paid semi-annually). A) 2.39% B) 4.78%  C) 5.81%  D) 11.62% Solution: B Current Yield = Annual coupon / Current price = $60/$1033 = 5.81%

(Q3 IN TYPE B) WHAT IS THE CURRENT YIELD OF THE FOLLOWING BOND

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