Assume the Required Return on a Zero-Coupon Bond Will Remain

Multiple Choice

Assume the required return on a zero-coupon bond will remain constant over the remainder of its life. The market value of the bond will:

A) Increase each year by an amount equal to the imputed coupon rate for the period.
B) Increase each year by an amount equal to the imputed interest for the period.
C) Increase each year by an amount equal to the bond's current yield.
D) Decrease each year by an amount equal to the bond's yield to maturity.
E) Remain unchanged.