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Question 19 The coupon rate on a bond is 3.22%. The par value of the bond...

Question 19

The coupon rate on a bond is 3.22%. The par value of the bond is $1,000. The bond has a maturity of 4 years. If today's price of the bond is $1,029.61, what is the current yield?

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Answer #1

Current Yield = Annual Coupon Payment / Current Bond Price

= [3.22% * $1,000] / $1,029.61

= $32.20 / $1,029.61

= 0.0313, or 3.13%

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