Question: A zero-coupon bond with a par value of $1,000 matures in five years. The firm is in financial distress. There is a 30 percent chance that the firm will not be able to repay the principle. That is, there is a 30 percent change that the principle repayment will be zero and a 70 percent chance that the principle repayment will be the full $1,000. If the price of the bond is USD 500, find the bonds expected yield to maturity?