Question

Asked Nov 6, 2019

Calculate the price of a zero-coupon bond that matures in 10 years if the market interest rate is 6 percent. (Assume semiannual compounding and $1,000 par value.)

A.) $553.68

B.) $558.66

C.) $940.00

D.) $1,000.00

Step 1

**Formula:**

Step 2

**Computation of zero-coupon bond price:**

Hence, the price of the zero-coupon bond is** $553.68**

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