Mary Smith wants to invest in four-year bonds that are currently priced at $856.00. These bonds have a coupon rate of 5.0 percent and make semiannual coupon payments. What is the current market yield on this bond? (Round intermediate calculations to 5 decimal places, e.g. 1.25145 and final answer to 2 decimal places, e.g. 15.25%.)
Current yield on bond = Annual coupon/Current bond price
Current yield on bond = (5% * $1000)/$856 = 5.84%
Mary Smith wants to invest in four-year bonds that are currently priced at $856.00. These bonds...