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

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

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.)

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