Consider a Zero-Coupon Bond with a $1,000 Face Value and 20

question 29

Multiple Choice

Consider a zero-coupon bond with a $1,000 face value and 20 years to maturity.The price this bond will trade for if the YTM is 6% is closest to:

• A) $215
• B) $312
• C) $335
• D) $306

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Definitions:

Risky Decision

involves making choices under conditions of uncertainty, where the outcomes may include potential losses or gains.

Reference Group

Groups of people that individuals compare themselves to for the purpose of evaluating their behaviors, attitudes, and norms.

Mere Exposure

A psychological phenomenon whereby people tend to develop a preference for things merely because they are familiar with them.

Group Effects

Influence on an individual's behavior, attitudes, or opinions due to the presence or pressure of a group.