Ameritech Has Just Issued a $1,000 Par Value Bond That

Multiple Choice

Ameritech has just issued a $1,000 par value bond that will mature in 10 years. This bond pays interest of $45 every six months. If the annual yield to maturity of this bond is 8%, what is the price of the Ameritech bond if the market is in equilibrium?

A) $991.50
B) $1,067.96
C) $1,112.82
D) $1,141.19