Perpetuities.The Canadian Government has once again decided to issue a consol(a bond with anever-ending interest payment and no maturitydate). The bond will pay $40 in interest each year(at the end of theyear), but it will never return the principal. The current discount rate for Canadian government bonds is 7.5%. What should this consol bond sell for in themarket? What if the interest rate should fall to 6.5%? Rise to 8.5%? Why does the price go up when interest ratesfall? Why does the price go down when interest ratesrise?