Question

A bond that pays interest semiannually has a price of $941.35 and a semiannual coupon payment of $26.00. If the par value is $1,000, what is the current yield

Answer 1

Answer:

5.52%

Explanation:

Calculation to determine the current yield

Current yield = ($26.00 × 2)/$941.35

Current yield=$52/$941.35

Current yield= .0552*100

Current yield= 5.52%

Therefore the Current yield is 5.52%