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Suppose that you invested in a twenty-year zero coupon bond with a face value of $1000. The bond originally cost $543. It is now 4 years later. Suppose that today (four years later) comparable bonds are yielding 4.5%, if you sold the bond today, would you have a capital gain or loss? A. Capital Gain >$120 B. Capital Loss >$120 C. Capital Gain <$120 D. Capital Loss<$120 E. No Gain or Loss

Suppose that you invested in a twenty-year zero coupon bond with a face value of $1000. The bond originally cost $543. It is now 4 years later. Suppose that today (four years later) comparable bonds are yielding 4.5%, if you sold the bond today, would you have a capital gain or loss? A. Capital Gain >$120 B. Capital Loss >$120 C. Capital Gain <$120 D. Capital Loss<$120 E. No Gain or Loss

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Suppose that you invested in a twenty-year zero coupon bond with a face value of $1000. The bond originally cost $543. It is now 4 years later. Suppose that today (four years later) comparable bonds are yielding 4.5%, if you sold the bond today, would you have a capital gain or loss? A. Capital Gain >$120 B. Capital Loss >$120 C. Capital Gain <$120 D. Capital Loss<$120 E. No Gain or Loss
Transcribed Image Text:Suppose that you invested in a twenty-year zero coupon bond with a face value of $1000. The bond originally cost $543. It is now 4 years later. Suppose that today (four years later) comparable bonds are yielding 4.5%, if you sold the bond today, would you have a capital gain or loss? A. Capital Gain >$120 B. Capital Loss >$120 C. Capital Gain <$120 D. Capital Loss<$120 E. No Gain or Loss
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