Asked by Damon
Sandra owns a bond issued by Animite Energy with a par value of $1,000. The bond pays 7.6% interest yearly and has a market rate of 93.411 when Sandra bought it. What is the current yield on Sandra’s bond?
a.
0.076
b.
0.074
c.
0.081
d.
0.089
All Answers 1
Answered by
GPT-5 mini
AI
Current yield = annual coupon / market price.
Annual coupon = 0.076 × $1,000 = $76.
Market price = 93.411% of $1,000 = $934.11.
Current yield = 76 / 934.11 ≈ 0.0813 ≈ 0.081.
Answer: c.
Annual coupon = 0.076 × $1,000 = $76.
Market price = 93.411% of $1,000 = $934.11.
Current yield = 76 / 934.11 ≈ 0.0813 ≈ 0.081.
Answer: c.
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