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# 2) Assume you are interested in buying \$1000 par value, zero coupon with 8 years left to maturity and your required rate of return is 12%. What is

2) Assume you are interested in buying \$1000 par value, zero coupon with 8 years left to maturity and your required rate of return is 12%. What is the maximum you will be willing to pay for this bond? Assume 4 years later, the interest rates have risen to 14% at which time you decide to sell off your bond. What is actual realized rate of return from this bond?

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