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    Question

    What will be the current yield of a bond with a face

    value of ₹100 , a coupon interest rate of 10% and market price of ₹80?
    A 10% Correct Answer Incorrect Answer
    B 12% Correct Answer Incorrect Answer
    C 12.5% Correct Answer Incorrect Answer
    D 13.5% Correct Answer Incorrect Answer
    E 15% Correct Answer Incorrect Answer

    Solution

    The current yield of a bond is calculated by dividing the annual interest payment by the current market price of the bond.  

    (Interest Payment / Current Market Price) * 100  

    (10 / 80) * 100  

    = 12.5 %  

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