A corporate bond with a face value of $1,000 matures in 5 ears and pays $40 coupon payments twice a year. The current price of the bond is $925. If one were to try to determine the yield-to-maturity of this bond by trial and error, a logical first guess would be which one of the following?

(Please mark the best answer and then explain your answer.)

a. 7%

b. 8%

c. 9%

d. Cannot be determined from information given.