A Firm Has a Single Issue of a Zero Coupon

question 6

Multiple Choice

A firm has a single issue of a zero coupon debt that promises to pay $90 in 4 years,and the A₀ = $100,r = 5%,σ = 15%,and δ = 0.If the asset has no chance of total default,what is the value of the debt?

• A) $67.10
• B) $75.19
• C) $85.62
• D) $90.00

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Definitions:

Keystone Species

A species that plays a critical role in maintaining the structure of an ecological community, affecting many other organisms in the ecosystem and helping to determine the types and numbers of various other species in the community.

Ecological Niche

The specific role or function of an organism or species in an ecosystem, including its use of resources and relationships with other organisms.

Biological Community

A group of interacting species living together in the same habitat, forming a complex network of relationships.

Abiotic Environment

The inanimate chemical and physical components of the environment that influence living beings and ecosystem operations.