QUESTION 3

On June 1^st, 2020 Coca Cola (KO) issued bonds for one billion dollars. The bonds have a par value of $1,000, coupon rate of 2.75% payable semiannually, and 40 years maturity (maturity date: 6/1/2060). Exactly three years later (6/1/2023), these bonds were selling at $681.83. If an investor buys the bond at this price, what would be her yield to maturity? In other words, how much interest would she earn per year on these bonds? (Don't forget to annualize your answer by multiplying it times two).

		2.27% per year.
		4.53% per year.
		2.88% per year.
		cannot be determined.