Consider two $15,000 face value corporate bonds. Bond A is
currently selling for $14,970 and matures in 16 years.
Bond B sells for $14,025 and matures in 4 years. Calculate
the current yield for both bonds if both have a coupon rate
equal to 6%. (Assume a yearly coupon payment).
1)Current yield Bond A to 2 decimal places %
2)Current yield Bond B to 2 decimal places %
3)YTM Bond A to 2 decimal places %
4)YTM Bond B to 2 decimal places %
5)Which current yield is a better approximation of the yield to
maturity, A or B?