A P 1,000,000 issue of 3%, 15-year bond was sold at 95%. What is the rate of interest of this investment? A. 3.0% B. 3.4% C. 3.7% D. 4.0%

Substituting these values into the formula, we get:

$YTM = \dfrac{30,000 + \dfrac{1,000,000 – 950,000}{15}}{950,000} = 3.4\%$

Therefore, the rate of interest of this investment is 3.4%.

Option A is incorrect because it is the coupon rate of the bond, not the yield to maturity.

Option C is incorrect because it is the yield to maturity of a bond that is sold at par value.

Option D is incorrect because it is the yield to maturity of a bond that is sold at a discount of 5%.