What would be the value of the zero coupon rate bond

Reference no: EM13269034

A 17-year, $1,000 par value zero-coupon rate bond is to be issued to yield 7 %.
A. What should be the initial price of the bond? (Take the present value of $1,000 for 17 years at 7%).
B. If immediately upon issue, interest rates dropped to 6%, what would be the value of the zero coupon rate bond?
C. If immediately opon issue, interest rates increased to 9%, what would be the value of the zero coupon rate bond?

Reference no: EM13269034

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