SIE practice questioneasyYield calculations
An investor buys a $1,000 par 6% corporate bond at par. What is the current yield?
- A6%✓ Correct answer
- B5%
- C7%
- D8%
Explanation
Why A — 6%
Current yield is annual interest divided by current market price. At par, the current yield equals the coupon rate, which is 6%.
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