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

---

Definitions:

Product

Anything that can be offered to a market that might satisfy a want or need, including physical goods, services, and experiences.

Period

A length of time during which a series of events or an action takes place or is completed.

Absorption Costing

A cost calculation method within accounting that assimilates all expenses incurred during manufacturing, covering direct materials, direct labor costs, and all overheads, whether fixed or variable, into the product’s price.

Income Statement

A financial statement that shows a company's revenue and expenses over a specific period, detailing net profit or loss.