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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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