The statement that the current yield on a bond is the yearly interest of the bond divided by the cost of the bond at closing if false.
What is current yield?
The current yield is also defined as the interest yield or income yield or flat yield or market yield or mark to market yield or running yield.
It is a financial term that is used in quotation to bonds and another fixed-interest securities like golds.
The formula of calculating the current yield are as follows:
[tex]\text{Current Yield} = \dfrac{\text{Annual Interest Earned}}{\text{Current Price of the Bond}}[/tex]
Therefore, the given statement is false.
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