On the secondary market, bonds are trading at $11.05. The bonds have a $3.75% coupon rate paid annually and mature in five years. What is the yield to maturity (expressed at an annual rate) for the bonds if an investor buys them at the $1105 market price, and what is the current yield?
This bond has a yield to maturity rate of 1.55% and a current yield of 3.39%
This bond has a yield to maturity rate of 1.38% and a current yield of 3.75%
This bond has a yield to maturity rate of 1.55% and a current yield of 3.75%
The bond has a yield to maturity rate of 5.63% and a current yield of 3.39%