Consider a zero-coupon bond with $1,000 face value and 20 years to maturity.The price will this bond trade if the YTM is 6% is closest to:

Name: Consider a zero-coupon bond with $1,000 face value and 20 years to maturity.The price will this bond trade if the YTM is 6% is closest to:
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Question

Quizplus · Accepted Answer

The price of a zero-coupon bond is calculated using the formula: Price = Face Value / (1 + YTM)^n. Plugging in the values: $1,000 / (1 + 0.06)^20 ≈ $311.80, which is closest to $312.

Consider a Zero-Coupon Bond with $1,000 Face Value and 20