What Should the Purchase Price of a 2-Year Zero-Coupon Bond

question 36

Multiple Choice

What should the purchase price of a 2-year zero-coupon bond be if it is purchased today and has face value of $1,000? $\begin{array}{lr}&\text { 1-Year } \\&\text { Forward }\\\text { Year } & \text { Rate } \\1 & 4.6 \% \\2 & 4.9 \% \\3 & 5.2 \% \\4 & 5.5 \% \\5 & 6.8 \%\end{array}$

• A) $966.87
• B) $911.37
• C) $950.21
• D) $956.02
• E) $945.51

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Definitions:

Extrinsic Rewards

Rewards given to an individual from an external source, such as money, prizes, or recognition, serving as an incentive for achieving certain goals.

Authentic Leadership

A leadership style emphasizing transparency, ethics, and openness, with leaders being true to themselves and their values.

Open And Honest Communications

A principle advocating for transparency and truthfulness in all forms of discourse, which fosters trust and understanding.

Transactional Leaders

Leaders who focus on the exchange process between themselves and their followers, motivating through rewards and penalties.