A coupon bond pays annual interest,has a par value of $1,000,matures in 4 years,has a coupon rate of 8.25%,and has a yield to maturity of 8.64%.The current yield on this bond is ___________.

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The current yield is the annual interest payment divided by the current market price of the bond. The annual interest payment is $1,000 * 8.25% = $82.50. The current market price of the bond can be found using the yield to maturity formula:$$Price = \frac{C}{(1+y)^1} + \frac{C}{(1+y)^2} + \frac{C}{(1+y)^3} + \frac{C+F}{(1+y)^4}$$where:* C is the annual interest payment* F is the par value of the bond* y is the yield to maturityPlugging in the values we know, we get:$$Price = \frac{82.50}{(1+0.0864)^1} + \frac{82.50}{(1+0.0864)^2} + \frac{82.50}{(1+0.0864)^3} + \frac{82.50+1000}{(1+0.0864)^4}$$$$Price = 943.39$$Therefore, the current yield is:$$Current Yield = \frac{Annual Interest Payment}{Current Market Price} = \frac{82.50}{943.39} = 8.75%$$

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