A coupon bond pays annual interest,has a par value of $1,000,matures in 4 years,has a coupon rate of 10%,and has a yield to maturity of 12%.The current yield on this bond is ___________.

Question

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The current yield is calculated as the annual coupon payment divided by the current market price of the bond. The annual coupon payment is $100 (10% of $1,000). To find the current market price, we need to calculate the present value of the bond's cash flows using the yield to maturity of 12%. However, since the exact market price isn't provided, we can assume the closest option to the calculated current yield based on typical bond pricing. The current yield is approximately 10.65%.

A Coupon Bond Pays Annual Interest,has a Par Value of $1,000,matures