Calculate the Yield to Maturity of a Zero-Coupon Bond with a Face

question 91

Multiple Choice

Calculate the yield to maturity of a zero-coupon bond with a face value of $1000, maturing in 15 years and selling for a price of $525.75.

• A) 5.62 percent
• B) 4.38 percent
• C) 8.74 percent
• D) 15.26 percent
• E) 16.27 percent

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Definitions:

Average Tax Rate

The proportion of total income that is paid in taxes, calculated by dividing total taxes paid by total income.

Tax Structure

The system or framework of how taxes are imposed in an economy, including rates, bases, and who is taxed.

Tax Structure

The system or arrangement of taxing different economic entities and transactions, encompassing the rates, bases, and administration of taxes.

Proportional

Proportional refers to a relationship where two quantities change at the same rate, maintaining a constant ratio between them.