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A Zero Coupon Bond with a Face Value of $1,000

Question 31

Multiple Choice

A zero coupon bond with a face value of $1,000 is issued with an initial price of $430.84 based on semiannual compounding.The bond matures in 20 years.What is the implicit interest,in dollars,for the first year of the bond's life?


A) $19.08
B) $22.56
C) $18.53
D) $21.47
E) $25.25

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