$1,000 par value zero-coupon bonds (ignore liquidity premiums)

One year from now bond C should sell for ________ (to the nearest dollar) .

A) $857
B) $894
C) $835
D) $821

Question

$1,000 par value zero-coupon bonds (ignore liquidity premiums) One year from now bond C should sell for ________ (to the nearest dollar) .A)  $857B)  $894C)  $835D)  $821

jeniffer Chavez · Accepted Answer

Final Answer : B, Explanation :   1.0799 3  = 1.06(1 + 1F 3 )2 1.2593621/1.06 = (1 + 1F 3 ) 2 1F 3  = 11.81%Price of bond C in 1 year = 1,000/1.1181 = 894.37

$1,000 par value zero-coupon bonds (ignore liquidity premiums)

One year from now bond C should sell for ________ (to the nearest dollar) .

A) $857
B) $894
C) $835
D) $821

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Learning Objectives

Learning Objectives

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