Using the RATE function in Excel (or the equivalent in another spreadsheet or business calculator), calculate the yield on a 10-year bond with a face value of $100 and a semi-annual, 5-percent coupon purchased at prices of:

(a) $108.18;

(b) $100.00;

(c) $92.56.

Comment.

[Excel hint: enter funds received by the bondholder (the coupon (Cpn =

Excel’s PMT) and the face value (FV)) as positive numbers and funds paid out (the purchase price (pB = PV)) as a negative number. The yield will be semi-annual and must be (simply) annualized before it is reported.]