Now let's look from the view of the investor who buys an 8 percent semiannual bond with 8 years remaining to maturity,when market rates are 6%.If this investor pays $1,125.44 for the bond,what is his current yield?

Question

Quizplus · Accepted Answer

The current yield is calculated as the annual coupon payment divided by the price of the bond. The bond pays 8% of its face value annually, which is $80 (assuming a $1,000 face value). The current yield is $80 / $1,125.44 = 0.0711 or 7.11%.

Now Let's Look from the View of the Investor Who