$34$

Multiple Choice $1\mathrm{.}5$ points

A bond has a par value of $$1\mathrm{.}000,$ a time to maturity of $20$ years, a coupon rate of $10\%$ with interest paid annually, a current price of $$850,$ and a yield to maturity of $12\%.$ Intuitively and without using calculations, if interest payments are reinvested at $10$ K $,$ the realized compound yield on this bond must be

$10\mathrm{.}9\%.$

$1000\%$

$8\mathrm{.}0\%.$

$20\%.$

$8\mathrm{.}5\%$

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