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A bond has a face value of ​$1 comma 200 and a 10​% coupon​ rate, its...

A bond has a face value of ​$1 comma 200 and a 10​% coupon​ rate, its current price is ​$1 comma 140​, and it is expected to increase to ​$1 comma 170 next year. QUESTION-- The current yield is (BLANK)%. ​(Enter your response rounded to one decimal​ place.)

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Answer #1

Face Value= $1,200

Coupon Rate = 10%

Current Price =$1,140

Expected price next year =$1,170

Since ,Current Yield = Int./Current price :-

Current yield = ($1200*10%)/1140 = $120/1140 = 10.5%(upto one decimal)

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