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SIE: Debt Securities
SIE practice questioneasyYield calculations

An investor buys a $1,000 par 6% corporate bond at par. What is the current yield?

  1. A6%✓ Correct answer
  2. B5%
  3. C7%
  4. D8%
Explanation

Why A6%

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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