Consider a Zero-Coupon Bond with a $1000 Face Value and 15

question 81

Multiple Choice

Consider a zero-coupon bond with a $1000 face value and 15 years left until maturity. If the bond is currently trading for $431, then the yield to maturity on this bond is closest to ________.

• A) 2.89%
• B) 56.90%
• C) 43.10%
• D) 5.77%

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Definitions:

Continuous

Pertaining to an uninterrupted occurrence or operation over time.

Fixed-Interval

A schedule of reinforcement where the first response after a specified amount of time has elapsed is rewarded.

Fixed Mindset

The belief that one's abilities, intelligence, and talents are fixed traits and cannot be significantly developed or improved.

Growth Mindset

The belief that abilities and intelligence can be developed through dedication and hard work, emphasizing the importance of effort and resilience.