A) $600
B) $800
C) $350
D) $700
Calculate the price of a zero coupon bond that has an interest rate of 6.65% (.0665), a face value of $100.00 and six-months to maturity.
What will be an ideal response?
We can use the formula from the text where Price (P) = Face value/(1 + i)n. In this case, P = $100/(1 + .0665)0.5, which equals $96.83.
Economics
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