A 7-year, $1,000 pair bond has an 8% annual coupon with a yield to maturity of 7.5%. Coupons are paid semiannually. This bond can be called in 2 years at a call price of $1,010. Assuming that the bond will be called, calculate the yield to call.

Question options:

1)	7.018% (THIS OPTION IS WRONG)

2)

7.218%

3)

3.506%

4)

7.012%

5)

7.791%

6)	None of the above

OPTION 1 IS WRONG