1.XYZ issued a 30 year bond 10 years ago. The coupon payment is 6%. The bond pay semi-annual interest payments and was issued at par value of $1,000.00 per bond. The Federal Reserve has cut rates to near zero and new comparable bonds to XYZ's are being issued with coupons of 3% now.

a. What should the current value of the bond be if markets are efficient?

b. From the anser above what is the percent change in the price of the bond from when it was issued?