The Yield to Maturity of a 20-Year Zero-Coupon Bond That

question 4

Multiple Choice

The yield to maturity of a 20-year zero-coupon bond that is selling for $372.50 with a value at maturity of $1,000 is

• A) 5.1%.
• B) 8.8%.
• C) 10.8%.
• D) 13.4%.
• E) None of the options are correct.

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Definitions:

Comparative Advantage

The ability of a party (an individual, a firm, or a country) to produce a particular good or service at a lower opportunity cost compared to others.

Geegaws

Trinkets or small, flashy objects of little value; often used to denote cheap or kitschy items.

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than another entity.

Geegaws

Ornamental objects of no substantial value, often considered trinkets or gadgets.