Use the figure for the question(s)below.
-A risk-free, zero-coupon bond with a face value of $1 000 has 15 years to maturity. If the YTM is 5.8%, which of the following would be closest to the price this bond will trade at?

Question

Use the figure for the question(s)below. 
-A risk-free, zero-coupon bond with a face value of $1 000 has 15 years to maturity. If the YTM is 5.8%, which of the following would be closest to the price this bond will trade at?

Quizplus · Accepted Answer

The price of a bond can be calculated using the formula: 
Price = Face value / (1 + YTM)^n, where YTM is the yield to maturity and n is the number of years until maturity. 
Plugging in the given values, we get: 
Price = 1000 / (1 + 0.058)^15 = $429 (rounded to the nearest dollar). 
Therefore, the closest option to this price is A) $429.

Use the Figure for the Question(s)below