Answer:
7.1%
Explanation:
Current yield is the ratio of coupon payment of a bond to its current market price. It is calculated by using coupon payment and the current market value of the bond.
As per given data
Coupon rate = 7%
Face value = $1,000
Market Value = $985
Coupon Payment = $1,000 x 7% = $70
Formula for Current yield is as follow
Current Yield = Annual Coupon Payment / Current Market Price
Current Yield = $70 / $985
Current Yield = 7.11%