Series 7 practice questioneasyDebt Securities 76
A 4% corporate bond quoted at 980 has a current yield closest to:
- A4.00%
- B4.08%✓ Correct answer
- C5.00%
- D3.00%
Explanation
Why B — 4.08%
Current yield equals annual interest divided by current market price. A 4% bond pays $40 annually per $1,000 bond, so the current yield is approximately 4.08%.
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