1.The Canadian government has decided to issue a consol (bond with a never-ending interest payment

and no maturity date).The bond will pay $50 in interest each year but never return the principal.

The bond will pay $50 in interest each year but never return the principal.The current discount

Rate for the Canadian govmt. Bond is 5.5%.

What should this bond sell for in the market?

What should the bond sell for if the int. rates fall to 4.0?

Or rise to 8.5%