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A bond with a face value of $10,000 that matures in exactly seven years has a...

A bond with a face value of $10,000 that matures in exactly seven years has a price of $10,494.63. The coupon rate is 4.2% p.a. and coupons are paid every six months. Which of the following figures is the closest to the yield to maturity?

(a) 4.2% p.a.

(b) 5.40% p.a.

(c) 3.40% p.a.

(d) 1.70% p.a.

Please do not use excel. Please show your detailed calculations using formulas. Please show formulas.

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