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

question 30

Multiple Choice

Consider a zero-coupon bond with a $1 000 face value and 10 years left until maturity. If the YTM of this bond is 10.4%, then the price of this bond is closest to:

• A)$1 040
• B)$1 000
• C)$372
• D)$602

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Definitions:

First-in

A term often used in inventory management that refers to goods sold or used in the same order as they were bought or produced.

Materials

The unprocessed materials and parts employed in goods manufacturing.

Equivalent Units

A method used in cost accounting to express the amount of work done on incomplete units in terms of fully completed units.

First-in

A term indicating the prioritization or usage of resources, often in the context of inventory management.