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A Zero Coupon Bond Is a Bond That Pays No

Question 27

Multiple Choice

A zero coupon bond is a bond that pays no return until it comes due and then pays the holder of the bond its face value. Suppose that a $4,000 zero coupon bond will come due on January 1, 2020. If the interest rate is 5% and will remain 5% forever, what will this bond be worth on January 1, 2005?

A) A zero coupon bond is a bond that pays no return until it comes due and then pays the holder of the bond its face value. Suppose that a $4,000 zero coupon bond will come due on January 1, 2020. If the interest rate is 5% and will remain 5% forever, what will this bond be worth on January 1, 2005? A) B) C) D) E) None of the above.
B) A zero coupon bond is a bond that pays no return until it comes due and then pays the holder of the bond its face value. Suppose that a $4,000 zero coupon bond will come due on January 1, 2020. If the interest rate is 5% and will remain 5% forever, what will this bond be worth on January 1, 2005? A) B) C) D) E) None of the above.
C) A zero coupon bond is a bond that pays no return until it comes due and then pays the holder of the bond its face value. Suppose that a $4,000 zero coupon bond will come due on January 1, 2020. If the interest rate is 5% and will remain 5% forever, what will this bond be worth on January 1, 2005? A) B) C) D) E) None of the above.
D) A zero coupon bond is a bond that pays no return until it comes due and then pays the holder of the bond its face value. Suppose that a $4,000 zero coupon bond will come due on January 1, 2020. If the interest rate is 5% and will remain 5% forever, what will this bond be worth on January 1, 2005? A) B) C) D) E) None of the above.
E) None of the above.

A Zero Coupon Bond Is a Bond That Pays No

Multiple Choice

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