What is the yield to maturity of a one-year, risk-free, zero-coupon bond with a $10,000 face value and a price of $9600 when released?

Name: What is the yield to maturity of a one-year, risk-free, zero-coupon bond with a $10,000 face value and a price of $9600 when released?
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Quizplus · Accepted Answer

The yield to maturity (YTM) for a zero-coupon bond is calculated as (Face Value / Price)^(1/Time) - 1. For this bond, YTM = ($10,000 / $9,600)^(1/1) - 1 = 0.04167 or 4.167%.

What Is the Yield to Maturity of a One-Year, Risk-Free