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Series 7: Investment Information & Recommendations
Series 7 practice questioneasyDebt Securities 76

A 4% corporate bond quoted at 980 has a current yield closest to:

  1. A4.00%
  2. B4.08%✓ Correct answer
  3. C5.00%
  4. D3.00%
Explanation

Why B4.08%

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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