bond’s current yield
The following information from the close of trading on January 15, 2010 is for an IBM bond with a face value of $1,000 and a maturity date of October 22, 2012:
Coupon rate: 5.050%
Price: $1,096.20
Yield to maturity: 2.101%
a. What was the bond’s current yield?
b. Why is the bond’s yield to maturity less than its coupon rate?
bond’s current yield