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11111nata11111 [884]
3 years ago
6

A corporate bond is quoted at a price of 98.96 and has a coupon rate of 4.8 percent, paid semiannually. What is the current yiel

d?
A) 4.24 percent
B) 4.85 percent
C) 5.36 percent
D) 5.62 percent
E) 4.66 percent
Business
1 answer:
Vadim26 [7]3 years ago
6 0

Answer:

B) 4.85 percent

Explanation:

The computation of the current yield is shown below:

As we know that

Current yield is

= Coupon rate ÷ Price of the corporate bond

= 4.8% ÷ 98.96

= 4.85%

Hence, the current yield is 4.85%

Therefore the correct option is B.

We simply applied the above formula so that the correct value could come

And, the same is to be considered  

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