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      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%

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