Suppose That a Zero-Coupon Bond Has a Face Value of $10,000

question 15

Multiple Choice

Suppose that a zero-coupon bond has a face value of $10,000 and 5 years to maturity.If the YTM is 7.2%,at what price will this bond be traded?

• A)$7,063.60
• B)$6,965.59
• C)$9,328.58
• D)$7,129.86
• E)$10,000

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Definitions:

Leonid Brezhnev

A Soviet politician who led the Soviet Union as General Secretary of the Communist Party from 1964 until his death in 1982.

Soviet Policy

The political strategy or principles governing the Soviet Union, particularly during the Cold War era, including approaches to economy, international relations, and internal governance.

Communist Orthodoxy

The strict adherence to the principles and doctrines of classical Marxism-Leninism within communist ideologies and practices.

Mass Gulag

Refers to the extensive network of forced labor camps operated by the Soviet Union under Stalin, where political prisoners and others were detained.