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 BBB rating is closest to ________.
A) 112.68
B) 131.46
C) 75.12
D) 93.90

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 BBB rating is closest to ________.
A) 112.68 
B) 131.46 
C) 75.12 
D) 93.90

Quizplus · Accepted Answer

D) Assuming face value of the coupon is $100, P = $100 / (1 + 6.5 / 100) = 93.90

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