Calculate the Price of a Zero Coupon Bond with Yield

question 85

Multiple Choice

Calculate the price of a zero coupon bond with yield to maturity of 8.75%,a face value of $1000,and maturing in 5 years.

• A) $1000
• B) $756.43
• C) $675.44
• D) $435.12
• E) $875.14

Recognize the significance of monitoring changes in disbursements to control expenses.

Identify different types of payment methods including certificates of guaranteed payment.

Comprehend the basics of the accounting process, including the recording of business transactions.

Know the use of specific types of checks in various professional scenarios.

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Definitions:

Legal Price

A price set by law or regulation, typically to prevent prices from being too high or too low in a market.

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, resulting in a stable market condition.

Commodity X

A placeholder name used to denote a specific, but unspecified, item in economic models and discussions.

Demand Equation

A mathematical expression that illustrates the relationship between the quantity demanded of a good and its price, along with other factors influencing demand.