Given that the risk-free rate is 7%, what is the value of a zero-coupon bond in which $10,000 will be paid in 15 years?
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A. B. C. D. E.D
In order to take the present value of the coupon and principal payments, one must know the required rate of return on the bond. The required rate of return is equal to the risk-free rate plus the risk premium. The risk premium is not given, so there is not enough information to answer the question.