A Two-Year Zero-Coupon Treasury Bond with a Maturity Value of $1,000

question 99

Multiple Choice

A two-year zero-coupon Treasury bond with a maturity value of $1,000 has a price of $873.4387.A one-year zero-coupon Treasury bond with a maturity value of $1,000 has a price of $938.9671.If the pure expectations theory is correct,for what price should one-year zero-coupon Treasury bonds sell one year from now?

• A) $798.89
• B) $824.66
• C) $852.28
• D) $930.23
• E) $989.11

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Definitions:

Population Pressure

The stress on resources and environment resulting from the density or increase of a population in a given area.

Exponential Growth

A population grows by a fixed percentage in successive time intervals; the size of each increase is determined by the current population size.

Limiting Factors

Environmental conditions that limit the growth, abundance, or distribution of an organism or a population within an ecosystem.

Life History Traits

Characteristic patterns and schedules of an organism’s growth, reproduction, and survival.