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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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