“$1,000 US Government Treasury Bond FREE! with any $999 Purchase” shouted the headline of an ad from a local furniture company. “Wow! Like, for sure, this is like getting the furniture like free,” said your friend Heather Dawn Tiffany. What Heather overlooked was the fine print in the ad where you learned that the “free” bond was a zero coupon issue with a 30-year maturity. Explain to Heather why the “free” $1,000 bond is more in the nature of an advertising “common” rather than something of large value.

Answer rating: 100% (QA)

The 1000 bond is a zero coupon bond which means that it does not pay periodic interest payments Inst... View the full answer