What Is the Current Price of a Zero-Coupon Bond with a 6

question 74

Multiple Choice

What is the current price of a zero-coupon bond with a 6 percent yield to maturity that matures in 15 years?

• A) $4.17
• B) $41.27
• C) $417.27
• D) $4,172.00
• E) $41,720.00

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Definitions:

Marginal Productivity Theory

An economic theory proposing that labor and other input costs are based on the marginal contribution of each input to the production process.

Income Distribution

The way in which total income is shared among individuals or groups in an economy.

Production Incentives

Motivational factors or rewards designed to encourage increased productivity or output by workers or companies.

Marginal Productivity Theory

An economic theory that explains income distribution based on the productivity of the factor inputs in producing goods and services.