A zero coupon bond has a face value of $1,000 and
matures in 4 years. Investors require a (n) 6.1% annual return on these bonds.
What should be the selling price of the bond? (Round to the nearest cent)
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The price of a zero coupon bond can be calculated using the formula
PB = Fmn/(1 +i/m)mn
The interest is paid annually thus mn would be 4*1=4
The selling price, PB would be
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