If a bond sells for $1,050 and pays $75 in interest annually, what is its current yield?

Name: If a bond sells for $1,050 and pays $75 in interest annually, what is its current yield?
Brand: Quizplus
Rating: 4.9 (44 reviews)

Question

Quizplus · Accepted Answer

To find the current yield, we divide the annual interest by the current price of the bond and then multiply by 100 to get a percentage. 
Current Yield = (Annual Interest / Current Price) x 100
Current Yield = ($75 / $1,050) x 100 
Current Yield = 0.0714 x 100 
Current Yield = 7.14 percent

If a Bond Sells for $1,050 and Pays $75 in Interest