You have been investing in stocks for years. Now, to diversity your personal portfolio, you decide to start investing in fixed income as well. You just bought a bond ($1,000 par value) for $875. The bond will mature in 6 years with annual coupon payments of $75. You hold the bond to maturity, and you do not reinvest your coupons. What was your effective EAR over the 6-year holding period?

A.

7.45%

B.

9.57%

C.

10.95%

D.

10.4%

E.

8.78%