The Total Interest Paid on a Zero-Coupon Bond Is Equal

question 42

Multiple Choice

The total interest paid on a zero-coupon bond is equal to:

• A)zero.
• B)the face value minus the issue price.
• C)the face value minus the market price on the maturity date.
• D)$1,000 minus the face value.
• E)$1,000 minus the par value.

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Definitions:

Governmental Agencies

Governmental agencies are public entities established by governments to enact policies, regulate activities, and administer services in various sectors.

Tax Rate

The percentage at which an individual or corporation is taxed.

Income Before

"Income Before" generally precedes specific deductions or expenses, such as taxes or interest, indicating a subtotal of income in financial statements.

Bonus

Additional compensation given to employees as a reward for their performance or for special occasions.