**Bond Yield Calculation**A bond has an annual coupon rate of 4.1% and has 4 years until maturity. If the bond is trading at a Yield to Maturity (YTM) of 6.1%, what is the bond's current yield?**TIP:** Current Yield = Annual Coupons / Current Bond Price---In this educational section, we explore how to calculate the current yield of a bond given specific financial conditions. The bond in this example has a specified coupon rate and years to maturity. Understanding how to apply these values to find the current yield allows investors to evaluate the income generated by the bond relative to its current market price. The formula provided simplifies this process.

Answered: A bond has an annual coupon rate of…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A bond has an annual coupon rate of 4.1%, and has 4 years until maturity. If the bonding trading at a YTM of 6.1%, what is the bond's current yield?