$\begin{array}{cc}\text { Year } & \text { 1-Year Forward Rate } \\1 & 5\% \\2 & 5.5\% \\3 & 6.0\% \\4 & 6.5\% \\5 & 7.0\%\end{array}$

question 1

Multiple Choice

$\begin{array}{cc}\text { Year } & \text { 1-Year Forward Rate } \\1 & 5\% \\2 & 5.5\% \\3 & 6.0\% \\4 & 6.5\% \\5 & 7.0\%\end{array}$
What should the purchase price of a 2-year zero-coupon bond be if it is purchased at the beginning of year 2 and has face value of $1,000?

• A) $877.54
• B) $888.33
• C) $883.32
• D) $894.21
• E) $871.80

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Definitions:

Rectal Examination

A medical procedure where a doctor inserts a lubricated, gloved finger into the rectum to check for abnormalities in the lower intestine and other internal organs.

Bruit

An adventitious sound of venous or arterial origin heard on auscultation; usually refers to the sound produced by the mixing of arterial and venous blood at dialysis shunts.

Medical Assistant

A healthcare professional who assists physicians in clinics and medical offices, often handling administrative and clinical tasks.