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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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