Asked by
mohamed Meeraj
on Nov 04, 2024
Verified
If a 6% coupon bond is trading for $950.00, it has a current yield of
A) 6.5%.
B) 6.3%.
C) 6.1%.
D) 6.0%.
E) 6.6%.
Coupon Bond
A type of bond that pays the holder a fixed interest payment (coupon) at regular intervals until the bond's maturity, when the principal is repaid.
Current Yield
The annual income (interest or dividends) divided by the current price of the security, used primarily for bonds.
Trading
The buying and selling of financial instruments like stocks, bonds, commodities, and derivatives within financial markets.
- Achieve proficiency in calculating the current yield on coupon bonds.
- Understand the concept of yield to maturity (YTM) and its significance.
Verified Answer
DR
Learning Objectives
- Achieve proficiency in calculating the current yield on coupon bonds.
- Understand the concept of yield to maturity (YTM) and its significance.