What is the yield to maturity on these $$100$ face value one$-$year bonds?

Instructions: Enter your responses rounded to one decimal place. If you are entering a negative number, be sure to include a negative sign $(-)$ in front of that number.

a$.$ A $6$ percent coupon bond selling for $$85.$

Yield to maturity is $22\mathrm{.}7$ Numeric ResponseEdit Unavailable. $22\mathrm{.}7$ incorrect.$\%.$

b$.$ A $7$ percent coupon bond selling for $$100.$

Yield to maturity is $7$ Numeric ResponseEdit Unavailable. $7$ correct.$\%.$

c$.$ An $8$ percent coupon bond selling for $$115.$

Yield to maturity is $-6\mathrm{.}5$ Numeric ResponseEdit Unavailable. $-6\mathrm{.}5$ incorrect.$\%.$

Of the options above $($a$$c$),$ which one has the highest yield to maturity and why?

Option C Incorrecthas the highest yield to maturity. While Option C Incorrecthas the lowest coupon rate, it is selling above Incorrectface value, and so there is a capital gain Correct.