Current yield is a financial metric used to assess the income generated by an investment, particularly bonds. It is calculated by dividing the annual interest payment by the current market price of the bond. This helps investors understand the return they can expect based on the bond's current value rather than its original purchase price. For example, if a bond pays interest of $50 annually and is currently priced at $1,000, the current yield would be 5%. This measure is useful for comparing different investments and determining which ones may offer better returns in the current market environment.