Assume that a $1,000-bond issued in 2015 pays $150 in interest each year. What is the current yield on the bond if it can be purchased for $1,200?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 22P
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Assume that a $1,000-bond
issued in 2015 pays $150 in
interest each year. What is the
current yield on the bond if it can
be purchased for $1,200?
Transcribed Image Text:Assume that a $1,000-bond issued in 2015 pays $150 in interest each year. What is the current yield on the bond if it can be purchased for $1,200?
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