The Difference in the Prices of a Zero-Coupon Bond and a Coupon

question 122

Multiple Choice

The difference in the prices of a zero-coupon bond and a coupon bond with the same face value and maturity date is simply:

• A) zero, since they are the same.
• B) the present value of the final payment.
• C) the present value of the coupon payments.
• D) the future value of the coupon payments.

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Definitions:

REM Rebound

The increase in REM sleep that occurs after a period of REM sleep deprivation.

Selective Attention

The mental process of concentrating on one particular piece of information while disregarding other data that can be sensed.

Circadian Rhythms

Biological processes that follow a roughly 24-hour cycle, regulating sleep, wakefulness, and numerous physiological functions in living organisms.

Delta Waves

Slow brain waves typically associated with the deepest stages of sleep and relaxation.