Question: 6. How do you solve for the approximate nominal and real interest rates? 7. How do current interest rates compare to those in the late

6. How do you solve for the approximate nominal and real interest rates?

7. How do current interest rates compare to those in the late 1970s-early 1980s and what accounts for the difference?

8. What does our author find to be the relative magnitude of the 4 components of historical nominal interest rates?

9. What does the buying and selling of bonds represent?

10. What do bond ratings represent and what is the relationship between those ratings, credit quality and required rates of

return?

11. How do you solve for the price of a bond?

12. What are the 2 bond pricing situations that you could face?

13. How do you solve for a bond's current yield?

14. How do you solve for the YTM of a zero coupon bond?

15. What is the process used to find the YTM of a coupon-paying bond and what key relationship from Chapter 3 is at the heart

of this process?

16. What is the relationship between the bond price vs. par, capital gain or loss, and YTM vs. coupon rate?

17.

EXCEL:

Which Excel functions can be used to find bond prices and YTMs?

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