A Zero-Coupon Bond Has a Yield to Maturity of 5

question 22

Multiple Choice

A zero-coupon bond has a yield to maturity of 5% and a par value of $1,000.If the bond matures in 16 years,it should sell for a price of __________ today.

• A) $458.00
• B) $641.00
• C) $789.00
• D) $1,100.00

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Definitions:

Cashews

Edible seeds harvested from the cashew tree, known for their distinct taste and numerous health benefits.

Comparative Advantage

The capacity of a person or a collective to perform a specific economic function more effectively than another function.

Specialization

The practice of focusing resources on the production of particular goods or services for which a person or entity has a competitive advantage.

Comparative Advantage

The ability of an individual or country to produce a particular good at a lower opportunity cost than another.