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By what amount would the current market price decrease

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Question - U.S. Treasury 30 year maturity, zero coupon bonds are currently selling in the marketplace with a yield to maturity of 7.00%. Even though the bonds have a coupon rate of 0.00%, please assume semi-annual compounding, which is the bond market convention? If inflation increased unexpectedly, forcing the nominal required rate of return on these Treasury bonds to increase by 1.00% to 8.00%, by what dollar amount would the current market price of these bonds decrease?

Reference no: EM132930825

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