Question: ii. 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

ii. Consider a 30 year, zero-coupon bond with a yield to

ii.

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: i. Calculate the price of the bond. (2 marks) ii. 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. (4 marks)

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