The Total Interest Paid on a Zero-Coupon Bond Is Equal

question 42

Multiple Choice

The total interest paid on a zero-coupon bond is equal to:

• A)zero.
• B)the face value minus the issue price.
• C)the face value minus the market price on the maturity date.
• D)$1,000 minus the face value.
• E)$1,000 minus the par value.

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Definitions:

Law of Demand

An economic principle stating that as the price of a good or service increases, the demand for it decreases, and vice versa, all else being equal.

Perfectly Competitive Markets

Markets characterized by many buyers and sellers, homogenous products, freedom of entry and exit, and perfect information, where no single participant can influence the market price.

Law of Demand

The principle that, all else being equal, as the price of a good or service increases, consumer demand for the good or service will decrease, and vice versa.

Competitive Markets

Markets where multiple buyers and sellers have the liberty to engage in trade based on mutual agreements.