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A 17-year, $1,000 par value zero-coupon rate bond is to be issued to yield 7 percent. (a) What should be the initial price of the
A 17-year, $1,000 par value zero-coupon rate bond is to be issued to yield 7 percent. (a) What should be the initial price of the bond?(Take the present value of $1,000 for 17 years at 7 percent.) (b) If immediately upon issue interest rates dropped to 6 percent, what would be the value of the zero-coupon rate bond? (c) If immediately upon issue, interest rates increased to 9 percent, what would be the value of the zero-coupon rate bond
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