Problem:
An investor is considering purchasing a bond with a 3.50 percent coupon interest rate, a par value of $1,000, and a market price of $917.50. The bond will mature in 9 years. Based on this information, answer the following questions:
Required:
Question 1: What is the bond's current yield?
Question 2: Calculate the bond's approximate yield to maturity?
Note: Provide support for rationale.