Six percent XYZ debentures are trading for $1,200. Other similarly rated bonds are being offered at 4.5%. What is the current yield on the 6% XYZ debentures?

Six percent XYZ debentures are trading for $1,200. Other similarly rated bonds are being offered at 4.5%. What is the current yield on the 6% XYZ debentures?



A) 1.5%.

B) 6%.

C) 7.5%.

D) 5%.



Answer: D) 5%.


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