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:

Green Or Blue Ink

Colored inks used for writing, with the choice often based on personal preference or specific document requirements.

Numerical Amount

A quantity or value expressed in numbers.

Written Amount

The value of a document or instrument stated in words.

Five And 62/100

A manner to express the numeric value 5.62, often found in financial documents.