Sandra owns a bond issued by Animite Energy with a par value of $1,000. The bond pays 7.6% interest yearly and has a market rate of 93.411 when Sandra bought it. What is the current yield on Sandra’s bond?

The bond pays 7.6% of its $1,000 par value each year, so its annual interest is $76. A market rate of 93.411 means Sandra paid 93.411% of par, or $934.11. Current yield is annual interest divided by market price: $76 ÷ $934.11 ≈ 0.081, or 8.1%. Therefore, the best answer is 0.081.

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