Consider a Zero Coupon Bond with 20 Years to Maturity

question 64

Multiple Choice

Consider a zero coupon bond with 20 years to maturity.The amount that the price of the bond will change if its yield to maturity decreases from 7% to 5% is closest to:

• A)$120
• B)-$53
• C)$53
• D)$673

---

Definitions:

Cash Position

A company's total cash and liquid assets minus its liabilities.

Joint Venturer

is an entity that engages in a joint venture, sharing control, resources, and risks with other ventures.

One-Line Method

A method used in accounting to consolidate a parent company's investment in a subsidiary when only a minority interest is owned.

Joint Control

A situation in corporate governance where two or more parties agree to share control over a business activity, ensuring decisions are made unanimously.