The Shamrock Corporation has just issued a $1,000 par value zero-coupon bond with an 8 percent yield to maturity, due to mature 15 years from today (assume semiannual compounding).
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What is the market price of the bond?
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If interest rates remain constant, what will be the price of the bond in three years?
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If interest rates rise to 10 percent, what will be the price of the bond in three years?