Given the Bond Described Above, If Interest Were Paid Semi-Annually

question 59

Multiple Choice

$\begin{array}{lc} \text {Par Value } &\$1,000\\ \text { Time to Maturity} & \text {18 Years}\\ \text { Coupon } &\text { 9 \% (paid annually) } \\ \text { Current price } &\$917.99\\ \text { Yield to Maturity } &12\%\\ &\\\end{array}$
Given the bond described above, if interest were paid semi-annually (rather than annually) and the bond continued to be priced at $917.99, the resulting effective annual yield to maturity would be

• A) less than 10%.
• B) more than 10%.
• C) 10%.
• D) Cannot be determined.
• E) None of the options are correct.

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