Asked by
Raymond Yates
on Oct 20, 2024
Verified
The yield to maturity of a 10-year zero-coupon bond with a par value of $1,000 and a market price of $625 is ________.
A) 4.8%
B) 6.1%
C) 7.7%
D) 10.4%
Yield to Maturity
The total return anticipated on a bond if the bond is held until its maturity date, taking into account both interest payments and capital gain.
Zero-Coupon Bond
A debt security that does not pay interest (coupon) during its life but is traded at a deep discount, offering a profit at maturity when the bond is redeemed for its full face value.
Market Price
Market Price is the current price at which an asset or service can be bought or sold in a competitive marketplace.
- Master the principles of pricing and yield calculation for a range of bonds, including zero-coupon, discount, and callable bonds.
Verified Answer
HC
Learning Objectives
- Master the principles of pricing and yield calculation for a range of bonds, including zero-coupon, discount, and callable bonds.