A 5-year zero-coupon bond that yields 7 is issued with a


1. A 5-year zero-coupon bond that yields 7% is issued with a $1000 par value. What is the approximate market value of the bond?

a 614

b 713

c 586

d 814

2. A 20-year bond pays 6% on a face value of $1,000. If similar bonds are currently yielding 7%, what is the market value of the bond? Use annual analysis

a over 1,000

b between 950 and 1000

c between 850 and 900

d between 680 and 800

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Financial Management: A 5-year zero-coupon bond that yields 7 is issued with a
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