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A zero coupon bond with a face value of $1,000 is issued with an initial price of $450. The bond matures in 8 years. What
A zero coupon bond with a face value of $1,000 is issued with an initial price of $450. The bond matures in 8 years. What is the implicit annual interest rate on the bond? NOTE: Assume all bonds (unless otherwise noted) have a $1,000 face value, which is a promise to pay $1,000 at maturity (when the loan comes due). coupons. That is, it is a bond where the company agrees to borrow money today in exchange for a single payment (\$1,000) at maturity. U.S. Treasury mentioned in the text book are an example. Multiple Choice 10.5% 9.5% 12.5% 11.5% 8.5%
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