A Ten-Year,zero-Coupon Bond with a Yield to Maturity of 6

question 30

Multiple Choice

A ten-year,zero-coupon bond with a yield to maturity of 6% has a face value of $1000.An investor purchases the bond when it is initially traded,and then sells it four years later.What is the internal rate of return (IRR) of this investment,assuming the yield to maturity does NOT change?

• A)0.26%
• B)3.07%
• C)6.00%
• D)7.65%
• E)8.14%

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Evaluation Criteria

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Trust Account

A bank account in which one party (the trustee) such as an attorney, holds funds belonging to another person (such as a client), a bank account into which funds advanced to a law firm by a client are deposited. Also called an escrow account.

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