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You own a bond with a par value of $1,000 and a coupon rate of 5%...

You own a bond with a par value of $1,000 and a coupon rate of 5% (semiannual coupon). You know it has a current yield of 8.75%. What is its yield to maturity? The bond has 7 years to maturity.
Current Yield = (annual payment / price). (hint: solve for price to answer the question).
A. 11.17%
B. 13.11%
C. 9.95%
D. 15.14%
E. 10.20%

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