You are purchasing a 25-year, zero-coupon bond. The yield to maturity is 8.68 percent and the face value is $1,000. What is the current market price?

Name: You are purchasing a 25-year, zero-coupon bond. The yield to maturity is 8.68 percent and the face value is $1,000. What is the current market price?
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The current market price of a zero-coupon bond is calculated using the formula: Price = Face Value / (1 + Yield)^Years. Plugging in the values: Price = $1,000 / (1 + 0.0868)^25 = $119.52.

You Are Purchasing a 25-Year, Zero-Coupon Bond