Asked by Peyton Bowers on May 21, 2024
Verified
An investor bought a 5 ½% bond at 99. Compute the current yield. (Round answer to two decimal places.)
Current Yield
The annual income (interest or dividends) divided by the current price of the security, often used in assessing bonds and other fixed-income investments.
5 ½% Bond
A bond that pays a 5.5% interest rate to its holders, typically annually or semi-annually.
- Gain an understanding of the current yield concept and its differentiation among distinct bonds.
Verified Answer
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Learning Objectives
- Gain an understanding of the current yield concept and its differentiation among distinct bonds.