You Purchase a 30-Year, Zero-Coupon Bond for a Price of $25

question 65

Multiple Choice

You purchase a 30-year, zero-coupon bond for a price of $25. The bond will pay back $100 after 30 years and make no interim payments. The annual compounded return (geometric average return) on this investment is ________.

• A) 4.49%
• B) 5.68%
• C) 4.02%
• D) 4.73%

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Definitions:

Unknown

In research and statistics, it refers to a quantity or a property which needs to be discovered or measured.

Confidence Level

The probability that the value of a parameter falls within a specified range of values, often associated with a confidence interval.

Confidence Interval

A range of values derived from sample data that is likely to contain the true population parameter with a specified level of confidence.

Population Mean

The average value of all elements in a population.