Assume the Required Return on a Zero-Coupon Bond Will Remain

question 346

Multiple Choice

Assume the required return on a zero-coupon bond will remain constant over the remainder of its life. The market value of the bond will:

• A) Increase each year by an amount equal to the imputed coupon rate for the period.
• B) Increase each year by an amount equal to the imputed interest for the period.
• C) Increase each year by an amount equal to the bond's current yield.
• D) Decrease each year by an amount equal to the bond's yield to maturity.
• E) Remain unchanged.

---

Definitions:

Aerobic Bacteria

Bacteria that require oxygen for their growth and survival, using it to produce energy through cellular respiration.

ATP Production

The process by which cells generate adenosine triphosphate, a molecule that stores and transports chemical energy within cells.

Cellular Respiration

The metabolic process by which cells produce energy in the form of ATP from glucose, typically occurring in the presence of oxygen.

Substrate

A substance or surface on which an enzyme acts or where a chemical reaction occurs.