1. A 5-year zero-coupon bond that yields 7% is issued with a $1000 par value. What is the approximate market value of the bond?
a 614
b 713
c 586
d 814
2. A 20-year bond pays 6% on a face value of $1,000. If similar bonds are currently yielding 7%, what is the market value of the bond? Use annual analysis
a over 1,000
b between 950 and 1000
c between 850 and 900
d between 680 and 800