Calculate the Price of a Zero-Coupon Bond That Matures in Five

question 63

Multiple Choice

Calculate the price of a zero-coupon bond that matures in five years if the market interest rate is 7.50 percent. (Assume semiannual compounding and $1,000 par value.)

• A)$692.02
• B)$696.57
• C)$962.50
• D)$1,000.00

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Definitions:

Mediation

A form of conflict resolution where a neutral third party helps disputing parties find a mutually acceptable solution.

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The standards and criteria used to determine what information is admissible in a court of law.

Arbitrators

Individuals or panels that are appointed to resolve disputes between parties through an arbitration process, often as an alternative to litigation.

Mediators

Neutral third parties who assist in resolving disputes between two or more parties by facilitating negotiations.