Suppose That There Are Three Zero Coupon Bonds with Maturity

question 34

Multiple Choice

Suppose that there are three zero coupon bonds with maturity date 1 year, 2 year and 3 year respectively. The current price of the 1 year, 2 year and three year bonds respectively are $826.45, $718.18 and $640.66 respectively. The yield to maturity of the first year bond is:

• A) 21%
• B) 18%
• C) 12%
• D) 11%

---

Definitions:

Ileum

The final and longest segment of the small intestine, playing a key role in absorbing nutrients and vitamins.

Large Intestine

The final section of the digestive system, responsible for water absorption and feces formation.

Glucose

A fundamental sugar crucial for energy provision in living entities and a constituent of various carbohydrates.

Amylase

An enzyme that helps in the digestion of carbohydrates by breaking down starches into simpler sugars.