A Treasury bond is quoted at a price of 104:18 with a 4.75% coupon. The bond pays interest semiannually. What is the current yield on one of these bonds?

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The current yield is calculated by dividing the annual coupon payment by the bond's price. The annual coupon payment is 4.75% of the bond's par value (assumed to be $1000 unless stated otherwise), which equals $47.50. The bond's price is quoted as 104:18, which translates to 104.5625% of par (since 18/32 = 0.5625), or $1045.625. Therefore, the current yield = ($47.50 / $1045.625) * 100 = 4.54%.

A Treasury Bond Is Quoted at a Price of 104:18