A 1 year zero-coupon Bond is priced at 98.00. Which one of the following statements is incorrect? A. 1-year spot-yield, rs₁ is given by the equation: 100 1+rs1 = 98.00 B. The dirty price of the bond will increase as time to maturity approaches. C. The maturity value of the bond is 100p. D. The Duration of the bond is its time to maturity.
A 1 year zero-coupon Bond is priced at 98.00. Which one of the following statements is incorrect? A. 1-year spot-yield, rs₁ is given by the equation: 100 1+rs1 = 98.00 B. The dirty price of the bond will increase as time to maturity approaches. C. The maturity value of the bond is 100p. D. The Duration of the bond is its time to maturity.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Can you please help with the question in the picture attached? The answer should be only one and I’m quite confused. Thank you!
Transcribed Image Text:A 1 year zero-coupon Bond is priced at 98.00.
Which one of the following statements is incorrect?
A. 1-year spot-yield, rs₁ is given by the equation:
100
1+rs1
= 98.00
B. The dirty price of the bond will increase as time to maturity
approaches.
C. The maturity value of the bond is 100p.
D. The Duration of the bond is its time to maturity.
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