Use the figure for the question(s)below.
-The current zero-coupon yield curve for risk-free bonds is shown above.What is the price per $100 face value of a four-year,zero-coupon,risk-free bond?

Question

Use the figure for the question(s)below. 
-The current zero-coupon yield curve for risk-free bonds is shown above.What is the price per $100 face value of a four-year,zero-coupon,risk-free bond?

Quizplus · Accepted Answer

The price of a zero-coupon bond is calculated using the formula: Price = Face Value / (1 + yield)^n. Given the yield curve, you would use the four-year yield to calculate the price. Assuming the yield is approximately 3.3% (as inferred from the options), the calculation would be: Price = $100 / (1 + 0.033)^4 = $87.99.

Use the Figure for the Question(s)below