Consider the following yields to maturity on various one-year, zero-coupon securities: The price (expressed as a percentage of the face value) of a one-year, zero-coupon corporate bond with a AAA rating is closest to ________.
A) 113.53
B) 132.45
C) 75.69
D) 94.61

Question

Consider the following yields to maturity on various one-year, zero-coupon securities:  The price (expressed as a percentage of the face value) of a one-year, zero-coupon corporate bond with a AAA rating is closest to ________.
A) 113.53 
B) 132.45 
C) 75.69 
D) 94.61

Quizplus · Accepted Answer

D) Assuming face value of the coupon is $100, P = $100 / (1 + 5.7 / 100) = 94.61

Consider the Following Yields to Maturity on Various One-Year, Zero-Coupon