Start with the partial model in the file Ch04 P24 Build a Model.xlsx on the textbook’s Web site. A 20-year, 8% semiannual coupon bond with a par value of $1,000 may be called in 5 years at a call price of $1,040. The bond sells for $1,100.

a. What is the bond’s yield to maturity? 

b. What is the bond’s current yield? 

c. What is the bond’s capital gain or loss yield? 

d. What is the bond’s yield to call? 

e. How would the price of the bond be affected by a change in the going market interest rate?

f. Now assume the date is October 25, 2020. Assume further that a 12%, 10-year bond was issued on July 1, 2020, pays interest semiannually (on January 1 and July 1), and sells for $1,100. Use your spreadsheet to find the bond’s yield.