What Is the Duration of a Zero Coupon Bond with fiVe

question 265

Multiple Choice

What is the duration of a zero coupon bond with five years to maturity that is currently priced at $980 and has an interest rate of 8%?

• A) 4.86 years
• B) 2.5 years
• C) 10 years
• D) 5 years
• E) Cannot be determined with the information provided.

Calculate the total amount required to settle multiple loans accumulated over time.

Evaluate and compute the necessary amounts for future financial needs based on current interest rates.

Understand and apply the principles of simple and compound interest.

Calculate the future or present value of investments at different interest rates.

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Definitions:

Racism

A set of beliefs about the claimed superiority of one racial or ethnic group; used to justify inequality and often rooted in the assumption that differences among groups are genetic.

Prejudice

An unfounded or negative bias or judgment towards individuals or groups, often based on stereotypes, without knowledge of the individual circumstances.

Discrimination

Unjust or prejudicial treatment of different categories of people, especially on the grounds of race, age, sex, or disability.

Institutional Discrimination

Discrimination that has been embedded into the policies, procedures, and practices of an organization or social system, leading to disadvantages for certain groups.