A ten-year bond pays 7% interest on a $1000 face value annually. If it currently sells for

Question:

A ten-year bond pays 7% interest on a $1000 annually. If it currently sells for $1,195, what is its approximate yield to maturity?
a) 9.33%
b) 3.46%
c) 5.34%
d) 4.52%
Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...