A 10-Year Zero-Coupon Bond That Yields 6% Is Issued with a $1,000

question 20

Multiple Choice

A 10-year zero-coupon bond that yields 6% is issued with a $1,000 par value. What is the issuance price of the bond?

• A) $558
• B) $64
• C) $614
• D) $1,000

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Definitions:

Management

Management involves the processes of organizing, planning, directing, and controlling resources efficiently and effectively to achieve predetermined objectives.

Retained Earnings

The portion of a company's profits not distributed as dividends but retained for reinvestment in the business or to pay debt.