Question: Priscilla will make a 2-year investment using two consecutive 1-year $500,000 zero coupon bonds. The maturity proceeds of the first zero coupon bond will be

Priscilla will make a 2-year investment using two consecutive 1-year $500,000 zero coupon bonds. The maturity proceeds of the first zero coupon bond will be rolled over into the second zero coupon bond. The purchase yields for the two 1-year zero coupon bonds will be 2.02% and 3.88% p.a., respectively (annual effective rates). Note that any surplus funds after one year can be invested for one year at a rate of 3.86% p.a. a) Calculate the price of second zero coupon bond. Round your answer to four decimal places. a. 481320.7398 b. 481324.6053 c. 481417.2925 d. 490099.9804

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