Please Provide Answer with correct option Calculate the price of a zero coupon bond that matures in 10 yearsif the market interest rate is 6 percent. Assume semi-annual interestpayments and $1,000 par value. (Round the answer to 2 decimalplaces.)a. $1,000.00b. $553.68c. $558.39d. $940.00

Step 1: Definition of Zero-Coupon Bonds:A zero-coupon bond makes only one payment to the…

Answered: Calculate the price of a zero coupon…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 9P

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Calculate the price of a zero coupon bond that matures in 10 years if the market interest rate is 6 percent. Assume semi-annual interest payments and $1,000 par value. (Round the answer to 2 decimal places.) a. $1,000.00 b. $553.68 c. $558.39 d. $940.00