I have four questions that relate to each other. If you can only answer one, I understand :) Thank you in advance.

(1) What is the value of a 10-year, $1,000 par value bond with a 10% annual coupon if its required rate of return is 10%?

(2) What would be the value of the bond described in Part 1 (above) if, just after it had been issued, the expected inflation rate rose by 3 percentage points, causing investors to require a 13% return? Would we now have a discount or a premium bond?

(3) What would happen to the bond's value if inflation fell and rd declined to 7%? Would we now have a premium or a discount bond?

(4) What would happen to the value of the 10-year bond over time if the required rate of return remained at 13%? If it remained at 7%? (Hint: With a financial calculator, enter PMT, I/YR, FV, and N, and then change N to see what happens to the PV as the bond approaches maturity.)