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John buys a $1,000 bond that pays 6% annual interest at 75. what is john's annual yield?

1 Answer

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To calculate the current yield of bonds.

We have the given par value of $1000, a market price of $750 and an interest rate of 6%.

Formula of current yield:

Yield = (interest rate * par value)/(market price) * 100%

= ((0.06 * $1000)/$750) * 100%

= ( $60/$750) * 100%

=0.08 * 100%

= 8%


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User Jiyinyiyong
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