Answer:
Zero-cupon bond= $294.14
Explanation:
Giving the following information:
Zero-coupon bonds with a yield to maturity of 8.5 percent.
Face value= 1,000
To calculate the price of the bond, we need to use the following formula:
Zero-cupon bond= [face value/(1+i)^n]
Zero-cupon bond= [1,000 / (1.085^15)
Zero-cupon bond= $294.14
