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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 $800?

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 $800?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 3P
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What is the current yield on the bond if it can be purchased for $800 on these general accounting question?

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 $800?
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 $800?
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