If you purchase a 5-year, zero-coupon bond for $691.72, how much could it be sold for 3 years later if interest rates have remained stable a. $848.12
b. $911.15
c. $923.50
d. $862.92

$862.92

Explanation:

We use this formula in other to solve this problem

price at issue = Fv / (1+r)n

Price at issue = $691.72

Future value fv = 1000

When we substitute into the formula

$691.72 = $1,000/(1+i)⁵

(1+i)⁵ =$1,000/$691.72

(1+i)⁵ = 1.445672

1 + i = (1.445672)1/5

1+i = 1.445672^0.2

1 + i= 1.0765

So that

I = 1.0765 -1

= 0.0765 also 7.65 %

We have after 3 years,

Price = Future Value/ (1+i)²

= $1,000/ 1.0765)²

= $1,000 / 1.158852

This gives us the value of

$ 862.9232

Therefore option d is the correct answer to the question

employers prefer to hire ingenious, resourceful people because ingenious people may be more liable to engage in unethical deportment as they can cerebrate outside of the box

answer; yield to maturity;