What is the yield to maturity on a 15-year, zero-coupon bond selling for 37.5% of par value?

Name: What is the yield to maturity on a 15-year, zero-coupon bond selling for 37.5% of par value?
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Question

Quizplus · Accepted Answer

The yield to maturity (YTM) for a zero-coupon bond can be calculated using the formula: YTM = [(Face Value / Present Value)^(1/n)] - 1, where n is the number of years to maturity. Plugging in the values: YTM = [(100 / 37.5)^(1/15)] - 1, which results in approximately 6.76%.

What Is the Yield to Maturity on a 15-Year, Zero-Coupon