A bond matures in 12 years, and pays an 8 percent annual coupon. The bond has a face value of $1,000, and currently sells for $985. What is the bond's current yield and yield to maturity?
A) Current yield = 8.00%; yield to maturity = 7.92%.
B) Current yield = 8.12%; yield to maturity = 8.20%.
C) Current yield = 8.20%; yield to maturity = 8.37%.
D) Current yield = 8.12%; yield to maturity = 8.37%.
E) Current yield = 8.12%; yield to maturity = 7.92%.
Correct Answer:
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