Suppose you purchase a 30-year, SEK 10,000 par value, zero-coupon bond with a yield to maturity (YTM) of 4.8%. You hold the bond for 6 years before selling it.
(a) What is the price of the bond when you buy it?
(b) If the bond's yield to maturity drops by 1% when you sell it, what is the internal rate of return of your investment?
(c) If the bond's yield to maturity drops by when you sell it, what is the internal rate of return of your investment
(d) If the bond's yield to maturity increases by 1% when you sell it, what is the internal rate of return of your investment?