Question: Excel Online Structured Activity: Band valuation You are considering a 25-year, $1,000 par value bond. Its coupon rate is 10%, and interest is paid serniannually.
Excel Online Structured Activity: Band valuation You are considering a 25-year, $1,000 par value bond. Its coupon rate is 10%, and interest is paid serniannually. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. X Open spreadsheet If you require an effective annual interest rate (not a nominal rate) of 7.4%, how much should you be willing to pay for the bond? Do not round intermediate steps. Round your answer to the nearest cent. $ Check My Work Reset Problem Excel Online Structured Activity: CAPM, portfolio risk, and return Consider the following information for three stocks, Stocks A, B, and C. The returns on the three stocks are positively correlated, but they are not perfectly correlated. (That is, each of the correlation coefficients is between 0 and 1.) Stock Standard Davlation Bata 15 % 0.8 Expected Return 8.44 % 9.73 11.45 B 15 1.1 15 1.5 Fund P has one-third of its funds invested in each of the three stocks. The risk-free rate is 5%, and the market is in equilibrium. (That is, required returns equal expected returns.) The data has been collected in the Microsoft Excel Online below. Open the spreadsheet and perform the required analysis to answer the questions below. X Open spreadsheet a. What is the market risk premium (CM - PRP)? Round your answer to two decimal places. % b. What is the beta of Fund P? Do not round intermediate calculations. Round your answer to two decimal places. c. What is the required return of Fund P? Do not round intermediate calculations, Round your answer to two decimal places. % d. Would you expect the standard deviation of Fund P to be less than 15%, equal to 15%, or greater than 15%? I less than 15% II. greater than 15% III. equal to 15%
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