A 17-year, $1,000 par value zero-coupon rate bond is to be issued to yield 7 percent.

Round "PV Factor" to 3 decimal places. Omit the "$" sign in your responses.

Question 12 (1 point)

a.)

What should be the initial price of the bond? (Take the present value of $1,000 for 17 years at 7 percent.)

Your Answer:Question 12 options:

Answer

Question 13 (1 point)

b.)

If immediately upon issue, interest rates dropped to 6 percent, what would be the value of the zero-coupon rate bond?

Your Answer:Question 13 options:

Answer

Question 14 (1 point)

c.)

If immediately upon issue, interest rates increased to 9 percent, what would be the value of the zero-coupon rate bond?

Your Answer:

Question 14 options:

Answer