Par Value $1000

Time to Maturity 20 years

Coupon 10% (paid annually)

Current Price $850

Yield to Maturity 12%

Given the bond described above, if interest were paid semi-annually

(rather than annually), and the bond continued to be priced at $850,

the resulting effective annual yield to maturity would be:

o less than 12%.

o more than 12%.

o 12%.

o Cannot be determined

o None of the options