If the 4.4% Treasury Bond 2024 is quoted at €114.00 on the Irish Stock Exchange, the flat yield is:

• A. 3.86%
• B. 2.50%
• C. 4.40%
• D. 5.02%

Answer: (A)

Flat yield is the annual coupon income you’d earn relative to the current price, ignoring any accrued interest. It’s calculated as annual coupon divided by price.

Here, the bond has a coupon of 4.4% of par, so the annual coupon is 4.40 per 100 of face value. With a market price of 114.00, the flat yield is 4.40 / 114.00 = 0.0386, or about 3.86%.

Because the price is above par, the yield is lower than the coupon, which is why the flat yield (3.86%) sits below the 4.40% coupon. The other figures would require a different price or coupon.