-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

---

Definitions:

Former Confederacy

Refers to the 11 Southern states that seceded from the Union and fought against the United States during the Civil War, from 1861 to 1865.

Black Codes

Laws passed in the United States, particularly in the Southern states after the Civil War, aimed at restricting African Americans' freedoms and compelling them to work in a labor economy based on low wages or debt.

Free Labor Principles

Ideals that oppose slavery and other forms of coerced labor, emphasizing the right of individuals to enter, negotiate, and operate within a labor market freely.

Radical Reconstruction

The period after the Civil War during which Northern leaders attempted to rebuild and transform the Southern states government and society, including granting civil rights to freed slaves.