Jill wants to buy 5-year zero coupon bonds with a face value of $1,000. Her required return on the bonds is 6.9 percent p.a. Assuming annual compounding, what would Jill be prepared to pay for the bond? a. $979.44 b. $1,020.83 c. $716.33 d. $847.89

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 8P
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Please provide answer this financial accounting question not use ai

Jill wants to buy 5-year zero coupon bonds with a
face value of $1,000. Her required return on the
bonds is 6.9 percent p.a. Assuming annual
compounding, what would Jill be prepared to pay
for the bond?
a. $979.44
b. $1,020.83
c. $716.33
d. $847.89
Transcribed Image Text:Jill wants to buy 5-year zero coupon bonds with a face value of $1,000. Her required return on the bonds is 6.9 percent p.a. Assuming annual compounding, what would Jill be prepared to pay for the bond? a. $979.44 b. $1,020.83 c. $716.33 d. $847.89
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