Suppose a Five-Year Bond with a 7% Coupon Rate and Semiannual

question 40

Multiple Choice

Suppose a five-year bond with a 7% coupon rate and semiannual compounding is trading for a price of $951.58.Expressed as an APR with semiannual compounding,this bond's yield to maturity (YTM) is closest to:

• A)7.0%.
• B)7.5%.
• C)7.8%.
• D)8.2%.

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