Using the Yield-Approximation Formula Discussed in Your Text, Determine the Average

Multiple Choice

Using the yield-approximation formula discussed in your text, determine the average annual yield on a bond whose current price is $1,100, par value is $1,000, coupon rate is 12 percent and whose term to maturity is ten years. Your answer is (to the nearest tenth of a percent) :

A) 10.5 percent
B) 11 percent
C) 11.5 percent
D) 12 percent
E) 12.5 percent