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Based on the following information concerning IMB's bonds: Par value: $1,000 Years to maturity: 12 years Coupon rate: 8% paid semiannually Beta: 0.8 Risk-free

Based on the following information concerning IMB's bonds: Par value: $1,000 Years to maturity: 12 years Coupon rate: 8% paid semiannually Beta: 0.8 Risk-free rate: 4% Market risk premium: 5% What is the expected price of the bond in 4 years? You believe that the risk free rate then will remain at 4% but the market risk premium is like to rise to 6% due to a worsening economic outlook.

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