Answer :
6.25%. The question is asking for current yield, not the coupon. Current yield is coupon rate divided by the current market price. In this case: 5% or $50 divided by $800 = .0625 or 6.25%
What is market price?
The price that an asset or service can currently be bought or sold for is known as the market price. Supply and demand factors influence how much an asset or service will cost in the market. Market price is set at a level where quantity supplied and quantity demanded are equal.
The price in effect on a particular day or at a specific moment is known as the market price. Market supply and demand are to blame for it. Long-term supply and demand combine to produce the normal price, on the other hand.
Find the point at which supply and demand are equal to determine the market price. Study market trends, the number of suppliers, and the number of current customers to determine the market price.
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