An investor buys a ₦1,000 bond with a coupon rate of 8% per annum at a market price of ₦800. What is the current yield of the bond?

Annual coupon payment = 8% × ₦1,000 = ₦80. Current yield = (Annual coupon ÷ Market price) × 100 = (₦80 ÷ ₦800) × 100 = 10%. Option A (8%) confuses the coupon rate with current yield, option C (12.5%) is the result of dividing ₦100 by ₦800, and option D (6.4%) incorrectly applies the coupon rate to the market price.