Questions: What is a bond's current yield?

The answer is the fourth one: Current yield = Annual coupon payment/Price.

Explanation for each option:

1. Current yield = Annual coupon/Face value: This is incorrect. The current yield is not calculated using the face value in the denominator.

2. Current yield = Current price/Face value: This is incorrect. This formula does not relate to the current yield; it seems to confuse the concept of yield with a price ratio.

3. Current yield = Annual coupon/Par value: This is incorrect. The par value is another term for face value, and the current yield is not calculated using the par value in the denominator.

4. Current yield = Annual coupon payment/Price: This is correct. The current yield of a bond is calculated by dividing the annual coupon payment by the current market price of the bond. This formula reflects the income return on the bond based on its current price.

In summary, the correct formula for a bond's current yield is the annual coupon payment divided by the current price of the bond.