Question

Consider a zero-coupon bond with a $1,000 face value and 10 years left until maturity. If...

Consider a zero-coupon bond with a $1,000 face value and 10 years left until maturity. If the YTM of this bond is 10.2%, then the price of this bond is closest to ________.

.

$378.60

b.

$530.04

c.

$454.32

d.

$1,000

e.

$232.96

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Answer #1

Value of bond=$1000/(1+YTM)^time period

=$1000/(1.102)^10

=$1000*0.378603003

=$378.60(Approx).

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