$\begin{array}{cc}\text { Year } & \text { 1-Year Forward Rate } \\1 & 4.6\% \\2 &4.9\% \\3 & 5.2\% \\4 & 5.5\% \\5 &6.8\%\end{array}$

question 10

Multiple Choice

$\begin{array}{cc}\text { Year } & \text { 1-Year Forward Rate } \\1 & 4.6\% \\2 &4.9\% \\3 & 5.2\% \\4 & 5.5\% \\5 &6.8\%\end{array}$
What should the purchase price of a 5-year zero-coupon bond be if it is purchased today and has face value of $1,000?

• A) $776.14
• B) $721.15
• C) $779.54
• D) $756.02
• E) $766.32

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Definitions:

Spin-off

A corporate action where a company "spins off" a section as a separate business, leading to the creation of a new independent company.

Merger

The combination of two or more companies into a single entity, where one survives and the others cease to exist.

White Knight

A friendly investor or company that acquires a corporation at fair consideration, often to prevent it from being taken over by a hostile party.

Corporate Takeovers

The process by which a company acquires control over another company, either through a direct purchase of shares or through other strategies.