A 10-Year, Zero-Coupon Bond with a Yield to Maturity of 5

question 2

Multiple Choice

A 10-year, zero-coupon bond with a yield to maturity of 5% has a face value of $1 000. An investor purchases the bond when it is initially traded, and then sells it five years later. What is the rate of return of this investment, assuming the yield to maturity does not change?

• A)4.07%
• B)4.01%
• C)4.26%
• D)5.65%

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Definitions:

Essentialism

A belief that things have a set of characteristics that make them what they are, and that the task of science and philosophy is their discovery and expression.

Queer Theory

Social theory about gender and sexual identity; emphasizes the importance of difference and rejects ideas of innate identities or restrictive categories.

Symbolic Interactionism

A theoretical perspective in sociology that focuses on how individuals interpret and give meaning to their social world through the use of symbols.

Social Construction

The concept that the reality of a particular situation or entity is constructed by the social processes and interactions that give it meaning.