Which of the following bonds has a higher current yield

Which of the following bonds has a higher current yield

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Reference no: EM13690183

1) Which of the following bonds has a higher current yield - i) a 6% coupon bond whose market price and face value are equal to $1000 or a ii) 7.5% coupon bond with $1000 face value and market price of $1250?

2) Consider the bond in option ii) above. Assume the term to maturity to be 30 years. Without using your calculator, what is the YTM approximately on the bond? Explain how you came up with your answer.

Reference no: EM13690183

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