What Is the Current Yield of a Four-Year Semi-Annual Pay

question 58

Multiple Choice

What is the current yield of a four-year semi-annual pay bond with a par value of $1,000 and a 4 percent coupon rate when the bond is priced at $932.35?

• A) 4.29%
• B) 4.00%
• C) 5.95%
• D) 2.14%

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Definitions:

Left Tail Area

refers to the portion of a distribution curve to the left of a specified value, often associated with finding probabilities in statistical analysis.

Degrees of Freedom

In statistics, the number of independent values or quantities that can be assigned to a statistical distribution.

Distribution Table

A table that displays the frequency of various outcomes in a sample, often used in statistics to organize data.

Rule of Five

A statistical rule stating that if a sample size is very small (n=5), the median can serve as an estimate of the population mean under certain conditions.