Series 7 - General Securities Representative Exam
An investor purchases a callable convertible bond that is currently trading in the market at 98. The bond is convertible at $30. If the basis is 8.5 percent and the nominal yield is 8 percent, what is the current yield?
Current yield formula is Annual interest divided by market price. The other information in this question is unnecessary and shows what a question on the actual exam may look like. 80/980 = 8.16%