Zero-Coupon Bond Assignment

hi

how to solve this question?

thank you ðŸ™‚

A financial institution invests in a zero-coupon bond with a maturity (principal)
value of \$900,000 and a maturity of 2 years. The bond is partially funded
through a libility with a current market value of \$475,000 and has a duration of
3 years. The current market rate is 7% and interest rates are expected to increase
by 1%. Which of the following statements is true?
(a) The current equity value of the position is \$425,000 and if interest rates increase
the equity value will increase.
(b) The current equity value of the position is \$311,095 and if interest rates increase
the equity value will decrease.
(c) The current equity value of the position is \$311,095 and if interest rates increase
the equity value will increase.
(d) The current equity value of the position is \$425,000 and if interest rates increase
the equity value will decrease.
(e) None of the given answers. Get Finance homework help today

Calculate the price
Pages (550 words)
\$0.00
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Australia Assessments
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
Testimonials
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Education
Thanks for your cooperation. Great work.
Customer 463647, December 16th, 2022
The paper met the expectation. Thanks!
Customer 463143, September 7th, 2022
History
The work was of amazing quality and was even better than I could have imagined.
Customer 454439, June 1st, 2020
Military
Excellent job.
Customer 456821, May 11th, 2022
Health Care
Thank you!
Customer 454001, February 7th, 2020
Human Resources Management (HRM)
Excellent combination.
Customer 462485, April 3rd, 2022
Thank you very much! Efficient and professional! I was literally "blocked" since 3 days
Customer 462519, February 3rd, 2022
Military
Good job
Customer 456821, November 13th, 2022
Good work.
Customer 458115, June 9th, 2022
This was by far one of the best that I have received!
Customer 453375, April 22nd, 2022
English 101
Excellent work.
Customer 460547, April 5th, 2022
Perfect!
Customer 459467, May 1st, 2022
11,595
Customer reviews in total
96%
Current satisfaction rate
3 pages
Average paper length
37%
Customers referred by a friend