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    Question

    A ₹1,000 face value bond, paying 10% annual coupon,

    maturing in 5 years, is currently selling for ₹1,100. What is its current yield?
    A 10% Correct Answer Incorrect Answer
    B 9.09% Correct Answer Incorrect Answer
    C 11% Correct Answer Incorrect Answer
    D 8.33% Correct Answer Incorrect Answer

    Solution

    Current Yield = (Annual Coupon Payment / Current Market Price) * 100 = (₹100 / ₹1,100) * 100 = 9.09%.

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