A $1,000 par value bond with a 12% coupon rate currently selling for $825 has a current yield of

Name: A $1,000 par value bond with a 12% coupon rate currently selling for $825 has a current yield of
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The current yield is calculated as the annual coupon payment divided by the current market price of the bond. The annual coupon payment is $1,000 * 12% = $120. The current yield is $120 / $825 = 0.1455 or 14.55%.

A $1,000 Par Value Bond with a 12% Coupon Rate