Question

A 16% bond with a face value of Rs. 250 is available for Rs. 200 in the market. The current yield on the bond is

A 16% Correct Answer Incorrect Answer
B 20% Correct Answer Incorrect Answer
C 80% Correct Answer Incorrect Answer
D 32% Correct Answer Incorrect Answer
E 36% Correct Answer Incorrect Answer

Solution

Coupon on the bond = 16% of Rs.250 = Rs.40 Yield = Coupon /MP = 40/200 = 20%

Practice Next

Relevant for Exams:

×
×