Consider a zero-coupon bond with a $100 face value and 10 years left until maturity. If the YTM of this bond is 11.1%, then the price of this bond is closest to: O A. $48.86 O B. $100.00 O C. $35.00 O D. $41.88

Consider a zero-coupon bond with a $100 face value and 10 years left until maturity. If the YTM of this bond is 11.1%, then the price of this bond is closest to: O A. $48.86 O B. $100.00 O C. $35.00 O D. $41.88

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 8MC: Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for...

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Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.

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Consider a zero-coupon bond with a $100 face value and 10 years left until
maturity. If the YTM of this bond is 11.1%, then the price of this bond is closest to:
...
O A. $48.86
B. $100.00
O C. $35.00
O D. $41.88

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