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**CFA Practice Question**

If an investor's required return is 12 percent, the value of a 10-year maturity zero-coupon bond with a maturity value of $1,000 is closest to:

A. $312

B. $688

C. $1,312

**Explanation:**n = 20 periods

i = 6% per period

$1,000 x 0.312 = $312

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**User Contributed Comments**
3

User |
Comment |
---|---|

arudkov |
how do we know that all calculations 2 be mane on semiannual basis? a ussed annual calculations and got 321 |

Jlinne |
assume semi-annual for all bond calculations unless stated otherwise. even for zero coupon bonds. |

cfastudypl |
use present value> 1/(1.06^20)*1000 = 311.8 approx to 312. |