Consider a Zero-Coupon Bond with $100 Face Value and 15

question 46

Multiple Choice

Consider a zero-coupon bond with $100 face value and 15 years to maturity. If the YTM is 7.4%, this bond will trade at a price closest to ________.

• A) $41.13
• B) $34.27
• C) $47.98
• D) $54.83

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Definitions:

Subjectivism

A philosophical stance asserting that knowledge and value are influenced by and dependent upon personal perspectives and experiences.

Fallacy

A mistake in the process of reasoning which makes an argument fundamentally incorrect.

Pony

A small horse breed known for its intelligence and strength.

Appeal To Majority

A fallacy that occurs when one asserts that a proposition is true because most people believe it to be true.