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The price of a two-year zero-coupon corporate bond with a notional value of 1000 is 895.5. The risk-free interest rate, or r, is two percent.

The price of a two-year zero-coupon corporate bond with a notional value of 1000 is 895.5. The risk-free interest rate, or r, is two percent. What is the fair value of a Five year zero coupon bond with the same seniority (i.e.R) issued by the same issuer if the bond default recovery rate R is 40percent and r, R, and the default (hazard) rate are all constant?

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