A bond with a face value of $1,000 matures in 9 years and has a 7% semiannual coupon. The bond currently sells for $846. You would pay $846 for each bond if you think that a “fair” market interest rate (discount rate) for such bonds is ____. (hint: find out what is the nominal yield to maturity first)
a) 10.24% b) 12.53% c) 11.28% d) 8.67% e) 15.60%