The 7 percent bonds issued by Modern Kitchens pay interest semiannually, mature in eight years, and have a $1,000 face value. Currently, the bonds sell for $987. What is the yield to maturity?
A) 6.97 percent
B) 6.92 percent
C) 6.88 percent
D) 7.22 percent
E) 7.43 percent
Correct Answer:
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