Calculate Bond Yield Relationships
Series 7 · Flashcards
SERIES 7 · FLASHCARDS
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QUESTION
State the formula for current yield on a bond.
QUESTION
Calculate current yield for a
5
%
5\%
5%
bond priced at
95
95
95
(par
=
$
1,000
=\$1{,}000
=
$1
,
000
).
QUESTION
What is the relationship between a bond's coupon rate and its market price relative to par?
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ANSWER
Coupon
>
>
>
market: premium; coupon
<
<
<
market: discount; equal: par
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