What is the total return on a 1-year, newly issued (365 days to maturity) zero-coupon bond priced at 95?
A) 5%.
B) 5.26%
C) 5.26% plus the implied coupon rate.
D) The return cannot be determined without knowing current interest rates.
Answer: B
Investments MCQ
Quantitative Measures and Investment Risks
What is the total return on a 1-year, newly issued (365 days to maturity) zero-coupon bond priced at 95?