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Business, 23.02.2021 03:10 jkemail19

Perpetuities. The Canadian Government has once again decided to issue a consol​ (a bond with a​ never-ending interest payment and no maturity​ date). The bond will pay ​$ in interest each year​ (at the end of the​ year), but it will never return the principal. The current discount rate for Canadian government bonds is ​%. What should this consol bond sell for in the​ market? What if the interest rate should fall to ​%? Rise to ​%? Why does the price go up when interest rates​ fall? Why does the price go down when interest rates​ rise? If the current discount rate for Canadian government bonds is ​%, what should this bond sell for in the​ market?

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Perpetuities. The Canadian Government has once again decided to issue a consol​ (a bond with a​ neve...
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