An Alpha bond has 2 years until maturity, carries a coupon rate of 5%, and sells for $1,022

Finance Nov 24, 2020

An Alpha bond has 2 years until maturity, carries a coupon rate of 5%, and sells for $1,022. The face value is $1,000. What is the current yield on the bond?

Expert Solution

current yield = coupon rate*par value/current price

Current yield%=(5/100)*1000/1022

Current yield% = 4.89

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