Available are three zero-coupon, ($1,000) face-value bonds. All of these bonds are initially priced using an 11-percent
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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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