Please help me solve this problem:
A 20 year, 1,000 par value zero-coupon rate bond is to be issued to yiled 11 percenmt.
a. Wht should be the initial price of the bond?
b. If immediately upon issue, interests rates dropped to 9 percent, what would be the value of the zero-coupon rate bond?
c. If immediately upon issue, interest rates increased to 13 percent, what would be the value fo the zero-coupon rate bond?
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