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Calculate the price of the bond now with the new yield

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Reference no: EM133120900

Question - Consider a 30 year, zero-coupon bond with a yield to maturity of 5 percent. If the bond is issued with a face value of RM500,000.

Required -

a) Calculate the price of the bond.

b) Suppose interest rate suddenly rise so that investors now demand a 6 percent yield to maturity before they invest in this bond. Calculate the price of the bond now with the new yield.

Reference no: EM133120900

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