You Have Just Purchased a 12-Year Zero-Coupon Bond with a Yield

question 47

Multiple Choice

You have just purchased a 12-year zero-coupon bond with a yield to maturity of 9% and a par value of $1,000. What would your rate of return at the end of the year be if you sell the bond? Assume the yield to maturity on the bond is 10% at the time you sell.

• A) 10.00%
• B) 20.42%
• C) -1.4%
• D) 1.4%

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Definitions:

Propagation

The act of reproducing plants or animals through natural or assisted methods like seeds, cuttings, or breeding.

Cashews

A type of nut obtained from the cashew tree (Anacardium occidentale) known for its distinctive shape and is a popular ingredient in snacks and culinary dishes.

Avocados

A nutrient-dense fruit known for its creamy texture and health benefits, including high levels of potassium and healthy fats.

Bananas

A tropical, crescent-shaped, yellow fruit that is soft and sweet when ripe, widely consumed and grown in humid regions around the world.