Question: What is the price of a zero coupon bond that has
What is the price of a zero-coupon bond that has a par value of $1,000? The bond matures in thirty years and offers a yield to maturity of 4.5 %. Calculate the price one year later when the bond has twenty-nine years left before it matures (assume the yield remains at 4.5%). What is the return that investors earn if they buy the bond with thirty years remaining and sell it one year later?
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