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    Calculating the current yield in given case of a Consol

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    What is the yield to maturity on a Consol that pays an annual coupon of $70, and sells for $700? What is the current yield of the console? Explain the relationship between yield to maturity and current yield on a Consol?

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    Current price of Consol=Po=$700
    Coupon amount of Consol=C=$70

    Current ...

    Solution Summary

    Solution calculates the current yield in the given case of a Consol. It also explains the relationship between YTM and current yield on a Consol.