Question

A bond purchased for $950 was sold for $980 after one year. the interest received during the year is $25. the bond's yield is:

Answer 1

The bond's yield is shown as a percentage of the dollar amount that was originally invested.

If a bond was purchased for $950 and sold for $980 and the interest received during the year is $25, then the bond's yield is 5.79%.

The bond yield is the return that an investor receives on a bond. The investor received 5.79% back on the bond from when he first purchased it at $950 and sold it for $980.