What is the yield on a bond sold for $1,850 and paying $25.50 in interest annually?

Name: What is the yield on a bond sold for $1,850 and paying $25.50 in interest annually?
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Question

Quizplus · Accepted Answer

To calculate the yield (or yield to maturity) of a bond, we need to divide the annual interest payment (in dollars) by the bond price, and then multiply by 100 to convert to a percentage. 
$25.50 / $1,850 = 0.01378
0.01378 x 100 = 1.38%
Therefore, the yield on this bond is 1.38%. The correct choice is C.

What Is the Yield on a Bond Sold for $1,850