A $1,000 face value corporate bond matures in 28 years,pays interest semiannually,and has a market quote of 98.625.The coupon rate is 7.25 percent,the current yield is ___ percent,and the yield to maturity is ____ percent.

Question

Quizplus · Accepted Answer

Current yield = (7.25% × $1,000)/(98.625% × $1,000)= .0735,or 7.35%Or:Current yield = 7.25%/98.625% = .0735,or 7.35% Yield to maturity = 3.68% × 2 = 7.37%

A $1,000 Face Value Corporate Bond Matures in 28 Years,pays