You have just purchased an Australian Treasury Bill, which is a zero-coupon bond security with a positive

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You have just purchased an Australian Treasury Bill, which is a zero-coupon bond security with a positive yield to maturity. The yield to maturity has decreased by 0.5% immediately after your purchase. In which direction should the price have moved?

a zero-coupon bond is one that only pays a single payment (i.e., the principal amount) at maturity. No coupons are paid.

a. None of the other answers

b. Upwards

c. Price will remain unchanged

d. Cannot determine from available information

Downwards

Related Book For answer-question

Microeconomics and Behavior

ISBN: 978-0078021695

9th edition

Authors: Robert Frank

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Posted Date: May 04, 2022 05:41 AM

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You have just purchased an Australian Treasury Bill, which is a zero-coupon bond security with a positive

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Expert Answer:

The correct answer is Upwards The Zerocoupon b... View the full answer

Microeconomics and Behavior

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