RatedrillCurrent yield
A time value of money problem from Ratedrill. Solve it with one answer box, with fresh numbers on every attempt and the formula, calculator keystrokes and Excel version in the worked answer, and it is checked the moment you submit.
The task
A $1,000 bond with a 2% annual coupon rate, paid semiannually, trades at $802.50. What is its current yield?
What this problem teaches
The formula: Current yield = annual coupon / price.
A hint if you get stuck
Current yield = annual coupon in dollars / current price.
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