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 $9 250 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 $9 250 when released?
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Quizplus · Accepted Answer

The yield to maturity (YTM) is calculated using the formula: YTM = [(Face Value / Price)^(1/Time Period)] - 1. For this bond, YTM = [($10,000 / $9,250)^(1/1)] - 1 = 0.0812 or 8.212%.

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