Calculate the Yield to Maturity of a Zero Coupon Bond

question 84

Multiple Choice

Calculate the yield to maturity of a zero coupon bond with a face value of $1000,maturing in 10 years and selling for a price of $628.72.

• A) 4.18%
• B) 4.75%
• C) 6.29%
• D) 8.23%
• E) 9.54%

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Definitions:

Convention on Contracts

Refers to international treaties or conventions that lay down rules for contracts, particularly in international trade, such as the United Nations Convention on Contracts for the International Sale of Goods (CISG).

Revoke the Offer

The act of withdrawing a proposal that was previously presented to another party before it has been accepted.

Offeree

The party to whom an offer is made in a transaction, who has the power to accept the offer to form a binding contract.

Offeror

The party in a contract who makes an offer to enter into an agreement.