Suppose the U

Multiple Choice

Suppose the U.S.Treasury offers to sell you a bond for $687.25.No payments will be made until the bond matures 5 years from now,at which time it will be redeemed for $1,000.What interest rate would you earn if you bought this bond at the offer price?

A) 8.80%
B) 6.93%
C) 6.70%
D) 7.48%
E) 7.79%