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

question 11

Multiple Choice

The following is a list of prices for zero-coupon bonds with different maturities and par values of $1,000. $$\begin{array} { c c } \text { Maturity } & \text { Price } \\\text { (Years) } & \\1 & \$ 943.40 \\2 & 881.68 \\3 & 808.88 \\4 & 742.05\end{array}$$ What is the price of a 4-year maturity bond with a 12% coupon rate paid annually? (Par value = $1,000.)

• A) $742.09
• B) $1,222.09
• C) $1,000.00
• D) $1,141.84
• E) None of the options are correct.

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Definitions:

Reaction Formation

A defense mechanism where an individual behaves in a way opposite to their actual feelings or desires, often to hide those feelings from themselves and others.

Unconscious Thoughts

Mental processes that influence behaviors and decisions without the individual's awareness.

Humanistic Psychologists

Psychologists who focus on individual potential and stress the importance of growth and self-actualization.

Behavior Analysis

The scientific study of principles of learning and behavior, focusing on objectively observable behaviors and disregarding mental activities.