Hello,
to get the current yield of the bond, determine first the annual interest payment which is calculated as stated
interest rate times the face value of the bond. In this question, the bond’s
value is $1,000 and the stated interest rate is 6.5 percent, therefore, the
annual interest payment is 65. Finally, the annual interest payment of 65 is
divided by the current market price quote of 101.23 to get the current yield of
64.21%. Hope this helps.
