Answer: effective annual yield A. 7.93 percent

Working notes for the above answer is as under

We have provided with the information that,

Technical Sales, Inc. has 6.6 percent coupon bonds

The bonds make semiannual payments and

currently sell for 92.5 percent of par.

What is the effective annual yield

Annualized rate is 6.6

and bonds make semiannual payments and

So effective annual yield calculated as follow

=Annual rate/2

=6.6/2

=3.3Emiannually

The formulla for effective annual yield is as under

(0.925*$1000)=0.066*$1000 x (1 – (1 / (1+r/2)9*2 ) /r/2 ) + $ 1000 / (1+r/2)9*2

Solving these Equation we will get 7.93%

=effective annual yield =7.93%