A bond has a 1-% coupon rate, a par value of $1000, and a market price of $800.

A bond has a 1-% coupon rate, a par value of $1000, and a market price of $800. What is the current yield of this bond?
a. 10%
b. 11.4%
c. 12.2%
d. 12.5%

 

Solution