25.13 Available are three zero-coupon, $1,000 face-value bonds. All of these bonds are initially priced using an
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25.13 Available are three zero-coupon, $1,000 face-value bonds. All of these bonds are initially priced using an 11-percent interest rate. Bond A matures one year from today, bond B matures five years from today, and bond C matures 10 years from today.
a. What is the current price of each bond?
b. If the market rate of interest rises to 14 percent, what will be the prices of these bonds?
c. Which bond experienced the greatest percentage change in price?
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Related Book For
Corporate Finance
ISBN: 9780071229036
6th International Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
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