Question

A bond has six years to maturity and has a coupon rate of 7.5 percent. Coupon payments are made annually and the bond has a face value of $1,000. The bond is currently selling in the market for $1,127. What is the yield-to-maturity on this bond?

A. 7.5 percent

B. 5 percent

C. 11.5 percent

D. 2.5 percent

E. None of the options is correct

Answer

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