A$1000-face-value bond has an 8% coupon rate, its current price is $1082, and its price expected to increase to $1126 next year. The bond has a current yield of: Select one: OA. 3.20% O B. 11.46% OC. 7.10% O D. 7.39%

A$1000-face-value bond has an 8% coupon rate, its current price is $1082, and its price expected to increase to $1126 next year. The bond has a current yield of: Select one: OA. 3.20% O B. 11.46% OC. 7.10% O D. 7.39%

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 13P: Yield to Maturity and Current Yield You just purchased a bond that matures in 5 years. The bond has...

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Concept explainers

Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.

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A$1000-face-value bond has an 8% coupon rate, its current price is $1082, and its price
expected to increase to $1126 next year. The bond has a current yield of:
Select one:
OA.
3.20%
O B.
11.46%
OC.
7.10%
O D.
7.39%

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