With a coupon rate of 8% and a current market price of $955.17, the bond's current yield, assuming six years to maturity, is:

Question

Quizplus · Accepted Answer

The current yield of a bond is calculated by dividing the annual coupon payment by the bond's current market price. With a coupon rate of 8%, on a $1,000 face value bond, the annual coupon payment is $80. Therefore, the current yield = $80 / $955.17 = 0.0838 or 8.38%.

With a Coupon Rate of 8% and a Current Market