A $1,000 face value bond is selling for $1,016.36.The bond pays interest semiannually and has 3.5 years to maturity.The yield to maturity is 5.48 percent.The current yield is ________ percent and the coupon rate is ________ percent.

Question

Quizplus · Accepted Answer

Using a financial calculator:
 11ea6d0e_c3ec_b14a_b3c7_5bddae31a452_TB1223_00 Current yield = ($30 × 2)/$1,016.36 = 5.90 percent
Coupon rate = ($30 × 2)/$1,000 = 6.0 percent

A $1,000 Face Value Bond Is Selling for $1,016