Final answer:
The current yield is defined as the annual interest on a bond divided by the market price of the bond.
Step-by-step explanation:
The current yield is defined as the annual interest on a bond divided by the market price of the bond.
For example, if a bond pays annual interest of $80 and has a market price of $1,000, the current yield would be $80/$1,000 = 8%.
It's important to note that the current yield calculates the return on investment based on the market price of the bond, which can fluctuate and may be different from the bond's face value.