-What Should the Purchase Price of a 5-Year Zero Coupon

question 51

Multiple Choice

$$\begin{array} { l | l } \hline \text { Year } & \text { 1-Year Forward Rate } \\\hline 1 & 4.6 \% \\\hline 2 & 4.9 \% \\\hline 3 & 5.2 \% \\\hline 4 & 5.5 \% \\\hline 5 & 5.8 \% \\\hline\end{array}$$
-What should the purchase price of a 5-year zero coupon bond be if it is purchased today and has face value of $1,000?

• A)$776.14
• B)$721.15
• C)$779.54
• D)$756.02
• E)$766.32

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Definitions:

External Inhibition

The decrease in the strength or occurrence of a behavior due to an external stimulus or change in environmental conditions.

Stimulus Discrimination

The ability to distinguish between different stimuli or cues, especially in the context of learning and behavior.

Extinction

In psychology, the gradual weakening and eventual disappearance of a conditioned response when the conditioned stimulus is no longer paired with the unconditioned stimulus.

Negative Reinforcement

A behavioral principle where the removal of an unfavorable condition strengthens a desired behavior.