A $1,000 par value, 12-year annual bond carries a coupon rate of 7%. If the current yield of this bond is 7.995%, its market price to the nearest dollar is

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The current yield is calculated as the annual coupon payment divided by the market price. The annual coupon payment is $70 (7% of $1,000). Given the current yield of 7.995%, the market price is $70 / 0.07995 = $876.09, which rounds to $876.

A $1,000 Par Value, 12-Year Annual Bond Carries a Coupon