Company X issued a bond two years ago at 6% coupon rate with maturity period of 10 Years. Bond pays annual coupon payments. The current interest rate in the market for this kind of bonds is 9%. What is the current yield on this bond? a) 7.43% b) 6.00% c) 7.19% d) 9.00%

Company X issued a bond two years ago at 6% coupon rate with maturity period of 10 Years. Bond pays annual coupon payments. The current interest rate in the market for this kind of bonds is 9%. What is the current yield on this bond? a) 7.43% b) 6.00% c) 7.19% d) 9.00%

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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Question

Company X issued a bond two years ago at 6% coupon rate with maturity period of 10
Years. Bond pays annual coupon payments. The current interest rate in the market for this
kind of bonds is 9%. What is the current yield on this bond?
a) 7.43%
b) 6.00%
c) 7.19%
d) 9.00%

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