U’ll pass the exam if u can get that one correct, On January 1, 2000, the Liz-Beth Company issued High grade AAB zero-coupon bonds for $68,301, which resulted in an effective interest rate of 10 percent. Admitting that u r in the 28% tax bracket and that the bonds’ face value was $100,000, and the maturity date was January 2004. Considering that forward rate are 0.845 basis points over the yield curve and given a duration of 7.3 and convexity of 3; What would be the amount of interest that is paid in 2000? A. [purposely removed] B. $6,830 C. $8,000 D. $10,000

A.

there is no interest paid for a zero coupon bond

$0

zero

LOL ok ok it was childish

is the correct answer $0?

Yes san1, unless you are aware of a zero-coupon bond which pays periodic interests