A firm offers a zero coupon bond with a face value of $1,000 that matures in 10 years.What is the current market price if the yield to maturity is 7.6 percent,given semiannual compounding?

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The correct answer is A because the current market price of the bond is $474.30. This can be calculated using the formula:Bond Price = Face Value / (1 + Yield to Maturity / Number of Compounding Periods)^ (Number of Compounding Periods * Number of Years to Maturity)In this case, the face value is $1,000, the yield to maturity is 7.6%, the number of compounding periods is 2 (since it is compounded semiannually), and the number of years to maturity is 10. Plugging these values into the formula, we get:Bond Price = 1000 / (1 + 0.076 / 2)^ (2 * 10)= 1000 / (1.038)^20= 1000 / 2.106= $474.30

A Firm Offers a Zero Coupon Bond with a Face