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?
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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