What Is the Value of a Zero Coupon Bond with a Yield

question 71

Multiple Choice

What is the value of a zero coupon bond with a yield to maturity of 9%,a par value of $1,000,and 10 years to maturity? (Assume semi-annual compounding)

• A) $208.29
• B) $414.64
• C) $422.41
• D) $643.93
• E) $910.00

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Definitions:

Double Covalent Bonds

Chemical bonds where two pairs of electrons are shared between atoms, resulting in a stronger and more stable bond than a single covalent bond.

Carbohydrates

Organic compounds consisting of carbon, hydrogen, and oxygen, typically found in sugars, starches, and cellulose, serving as a major energy source in the diet of animals.

Starches

Complex carbohydrates that are composed of many glucose units joined together, found in foods like potatoes, rice, and wheat.

Energy Nutrients

Nutrients such as carbohydrates, fats, and proteins that provide energy for the body to perform its functions.