A Coupon Bond Pays Annual Interest, Has a Par Value

question 115

Multiple Choice

A coupon bond pays annual interest, has a par value of $1,000, matures in four years, has a coupon rate of 8.25%, and has a yield to maturity of 8.64%. The current yield on this bond is

• A) 8.65%.
• B) 8.45%.
• C) 7.95%.
• D) 8.36%.
• E) None of the options are correct.

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