Asked by Rachel Weatherbee on Jul 02, 2024
Verified
An investor bought an 8 ½% bond at 108. 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 to measure the return on investment for bonds.
8 ½% Bond
A bond that pays an annual interest rate of 8.5% to its holders.
- Comprehend the principle of current yield and the method to compare it across various bonds.
Verified Answer
KY
Learning Objectives
- Comprehend the principle of current yield and the method to compare it across various bonds.