The Following Is a List of Prices for Zero-Coupon Bonds

question 29

Multiple Choice

The following is a list of prices for zero-coupon bonds with different maturities and par values of $1,000. You have purchased a 4-year maturity bond with a 9% coupon rate paid annually.The bond has a par value of $1,000.What would the price of the bond be one year from now if the implied forward rates stay the same?

• A)$995.63
• B)$1,108.88
• C)$1,000.00
• D)$1,042.78

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Definitions:

Internal Attribution

The inference that an event or a person's behavior is due to personal factors such as traits, abilities, or feelings.

External Attribution

The process of inferring that a person's behavior is due to situational factors outside of their control, rather than internal characteristics.

Harold Kelley

A psychologist known for his contributions to social psychology, especially in the areas of attribution theory and the covariance model.

Prisoner's Dilemma

A theoretical game in economics and psychology that illustrates why two individuals might not cooperate, even if it appears that it is in their best interest to do so.