Jorge bought one bond of Easter Company for 110. The original bond was 6 1/2 18 . Jorge wants to know the current yield to the nearest tenth percent.

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To calculate the current yield of a bond, we use the formula:

\[
\text{Current Yield} = \left( \frac{\text{Annual Coupon Payment}}{\text{Current Price of the Bond}} \right) \times 100\%
\]

Given:
- The original bond coupon rate is \(6 \frac{1}{2}\%\) or \(6.5\%\).
- The face value of the bond is usually \(100\) (assuming it's a standard bond).
- The current price Jorge paid for the bond is \(110\).

### Steps to Calculate:

1. **Calculate the Annual Coupon Payment**:
   \[
   \text{Annual Coupon Payment} = \left( \frac{6.5}{100} \right) \times 100 = 6.5 \text{ dollars}
   \]

2. **Determine the Current Yield**:
   \[
   \text{Current Yield} = \left( \frac{6.5}{110} \right) \times 100\% \approx 5.91\%
   \]

### Answer:
The current yield of the bond is approximately **5.9%**.

Do you want details or have any questions about this calculation?

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**Related Questions:**

1. What is the difference between current yield and yield to maturity?
2. How does the bond's price affect its current yield?
3. What factors might cause the price of a bond to increase?
4. How do you calculate the yield to maturity of a bond?
5. What is the impact of interest rates on bond prices?
6. What does a current yield indicate about a bond's performance?
7. How do coupon payments affect the overall yield of a bond?
8. What are the risks associated with investing in bonds?

**Tip:** Always consider both current yield and yield to maturity when evaluating bond investments to understand potential returns better.

Learn how to calculate the current yield of a bond using the formula. This problem involves a bond with a coupon rate of 6.5% and a purchase price of 110. Understand how to determine the annual coupon payment and compute the current yield. Suitable for advanced high school and college students.

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