Suppose You Purchase a Zero-Coupon Bond with Face Value $1,000

question 232

Multiple Choice

Suppose you purchase a zero-coupon bond with face value $1,000, maturing in 20 years, for $214.51. If the yield to maturity on the bond remains unchanged, what will the price of the bond be five years from now?

• A) $315.20
• B) $387.52
• C) $410.91
• D) $680.58
• E) $1,000.00

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Definitions:

Cool-Off Period

A legally mandated period allowing buyers to cancel a contractual agreement without penalty, typically seen in financial or real estate transactions.

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A test that measures the battery’s ability to produce current by loading it at one-half of its CCA rating for 15 seconds, during which time the battery voltage should not drop below 9.6 volts. Special equipment isrequired. Also called a high-capacity discharge test.