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A risk-free, zero-coupon bond has 15 years to maturity. Which of the following is closest to the price per $1,000 of face value at which the bond will trade if the current YTM is 6.1%?
a $411.40
b. $553.15
c $663.78
d. $885.05
e. $774.42

Respuesta :

Zviko

Answer:

The bond will trade at a. $411.40.

Explanation:

Use the following data to find the price, PV of the bond.

n = 15

pmt = $0

p/yr = 1

fv = $1,000

ytm = 6.10 %

pv = ?

Using a financial calculator, the bond price (PV) is $411,4047 or $411,40

Conclusion :

The bond will trade at $411.40 if the current YTM is 6.1%.

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