SIE practice questioneasyYield Calculations - Current Yield
What is the formula for a bond's current yield?
- AAnnual interest / Market price✓ Correct answer
- BMarket price / Annual interest
- CAnnual interest / Par value
- DMarket price / Par value
Explanation
Why A — Annual interest / Market price
Current yield = Annual interest divided by current market price. Par value is used for coupon rate, not current yield.
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