Question: Based on the following information concerning IMB's bonds: Par Value: $1000 YEars to Maturity: 12 years Beta: 1.0 Risk-free rate: 4% Market risk Premium: 5%

Based on the following information concerning IMB's bonds:

Par Value: $1000

YEars to Maturity: 12 years

Beta: 1.0

Risk-free rate: 4%

Market risk Premium: 5%

What is the expected price of the bond in 4 years? you believe that the risk free rate then will remain 4% but the market risk premium is like to rise to 8% due to a worsening economic outlook.

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