Asked by Kevin Buakuma-Sayers on Jun 14, 2024
Verified
An investor bought two bonds-bond A was an 8% bond at 110 and bond B was a 6% bond at 98. The commission was $5 per bond. Compute how much greater the current yield from bond A is than from bond B. (Round yields to two decimal places.)
Current Yield
The annual income (interest or dividends) divided by the current price of the security, usually expressed as a percentage.
Bond A
A type of fixed-income investment representing a loan made by an investor to a borrower, typically corporate or governmental.
Bond B
An investment product representing a loan made by an investor to a borrower, typically corporate or governmental, with specific terms for interest payments and principal return.
- Learn the idea of current yield and how to contrast it among assorted bonds.
Verified Answer
TG
Learning Objectives
- Learn the idea of current yield and how to contrast it among assorted bonds.