Author Question: Which of the following is true of a zero coupon bond? A) The bond sells at a premium prior to ... (Read 125 times)

charchew · **on:** Jul 10, 2018

Which of the following is true of a zero coupon bond?

A) The bond sells at a premium prior to maturity.
B) The bond makes no coupon payments.
C) The bond has a zero par value.
D) The bond has no value until the year it matures because there are no positive cash flows until
then.

Question 2

The current price on a 60-inch flat panel LCD HD television is 2,300. Big screen HD television prices have dropped at an average rate of 9 per year in recent years.

If you expect this trend to continue, how much will this style of television cost in three years?
A) 2,979
B) 2,300
C) 1,958
D) 1,733

duke02 · **Reply #1 on:** Jul 10, 2018

Answer to Question 1

B

Answer to Question 2

Answer: D
Explanation: D) Expected future value of television = 2,300 (1 - 0.09)3 = 1,733.21
MODE = END
INPUT 3 9 -2,300 0 ?
KEY N I/Y PV PMT FV
CPT 1,733.21