Current Yield of a Bond

The current bond price is the clean price of the bond.

One must note that the current yield represents the return from the bond at a particular time and does not represent the returns over the lifetime of the bond. The current yield also does not take into account the reinvestment risk.

Example:

Assume that a $100 par bond is currently trading at $95, and pays a coupon of 6%. The current yield will be given as follows:

Current yield = $6/$95 = 6.316%