A bond with five years remaining until maturity is currently trading for 101 per 100 of par value. The bond offers a 6% coupon rate with interest paid semiannually. The bond is first callable in three years and is callable after that date on coupon dates according to the following schedule:

The bond’s annual yield-to-maturity is closest to:

A. 2.88%.

B. 5.77%.

C. 5.94%.

End of Year 3 4 5 Call Price 102 101 100