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Assume that the price of a $1,000 zero-coupon bond with five years to maturity is $497 when the required rate of return is 15 percent.

Assume that the price of a $1,000 zero-coupon bond with five years to maturity is $497 when the required rate of return is 15 percent. If the required rate of return suddenly changes to 12 percent, what is the price elasticity of the bond?

	a.	.870
	b.	None of these are correct.
	c.	+.494
	d.	.494
	e.	+.870

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