1. A 12%, 20-year bond is currently trading at $1250. What is its current yield?
2. Zack buys a 10% corporate bond with a current yield of 6%. How much did he pay for the bond?
3. Which of the following three bonds offers the highest current yield?
a. A 9.5%, 20-year bond quoted at 977.50
b. A 16%, 15-year bond quoted at 1646.25
c. A 5.25%, 18-year bond quoted at 540.00