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Investment advice and corporate finance
Module 12Investment Management and Corporate FinanceWhat is the price of a five-year zero-coupon bond with a RM100 face value, priced to yield 4% a year (annual compounding)?
A zero pays only its face value at maturity: price = 100 ÷ 1.04^5 = RM82.19. RM85.48 discounts for four years instead of five. RM83.33 divides 100 by 1.20, simple interest for five years. RM96.15 discounts for one year only. Source: SIDC Module 12 Study Outline (Jul-Dec 2026) Section 5 Topic 9 Debt Financing; F. J. Fabozzi, Bond Markets, Analysis and Strategies (as at October 2026).
Using simple rather than compound discounting.
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