Fixed Income QQbank answer wrong? currently, interest, protect, willing, return

dreampak

Anne Warner wants to buy zerocoupon bonds in order to protect herself from reinvestment risk. She plans to hold the bonds for fifteen years and requires a rate of return of 9.5%. Fifteenyear Treasuries are currently yielding 4.5%. If interest is compounded semiannually, the price Warner is willing to pay for each $1,000 par value zerocoupon bond is closest to:
A) $249.
B) $256.
C) $498
What should be the answer to this. IMO B. But qbank says A.

hoangvu90

I figured out my mistake. A should be correct. Thanks.

defour44

It says interest compounded semi annually,
1000/ [(1+ 9.5%/2) ^(15*2)] = 248.53 –correct answer A

JRossSter

sidagg.
I was not aware of your updated posting when I posted previous reply, so it was superfluous.
Glad you figured out.