A Zero-Coupon Bond Has a Yield to Maturity of 9

question 75

Multiple Choice

A zero-coupon bond has a yield to maturity of 9% and a par value of $1,000. If the bond matures in eight years, the bond should sell for a price of _______ today.

• A) $422.41
• B) $494.47
• C) $513.16
• D) $483.49
• E) None of the options are correct.

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Definitions:

Needy Families

Refers to households with insufficient income or resources to maintain basic living standards, often qualifying them for governmental or charitable assistance programs.

Welfare State

A social system in which the government assumes primary responsibility for the welfare of its citizens by providing services such as healthcare, education, and financial support.

Income Inequality

The uneven distribution of income within a population, leading to a gap between the wealthiest and the poorest individuals or households.

Economic Inequality

The unequal distribution of income and opportunity between different groups in society.