27) A risk-free, zero-coupon bond with a face value of $5000 has 20 years to maturity....

Question

Question

Answer 1

Answer #1

Given,

Face value of the bond = $5000

YTM = 4.6%

Years to maturity = t = 20 years

Price of a zero-coupon bond = Face value/(1+YTM)^t = $ 5000/(1.046)^20 = $ 2033.93

Hence, the answer is option B.

Answer 2

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