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Malania is looking to purchase a 10-year, $10,000 face value zero-coupon bond. Assuming the current cost of debt is 6.00% per year. Which of the
Malania is looking to purchase a 10-year, $10,000 face value zero-coupon bond. Assuming the current cost of debt is 6.00% per year. Which of the following would describe the price change if the cost of debt rose to 7.00% per year?
a) Decrease by 8.80%
b) Decrease by 8.96%
c) Increase by 8.80%
d) Decrease by 9.65%
e) Increase by 8.96%
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