Question: Fill in the table using the correct EXCEL FORMULAS - this is being answer in excel so don't just show the math, use the actual
Fill in the table using the correct EXCEL FORMULAS - this is being answer in excel so don't just show the math, use the actual formula (ex. =FV, =PV)
a. What is the original price of the bond? b. Quantify the price and reinvestment risks for the holder of the bond if rates increase 1%. c. Quantify the net risk for the increasing rate scenario. d. Find the average annual holding period return under the scenario of interest rates increasing immediately and assuming any cash-flows received can be reinvest at the new interest rate. Redo part 5 assuming interest rates decreased 1%. a. What is the original price of the bond? b. Quantify the price and reinvestment risks for the holder of the bond if rates increase 1%. c. Quantify the net risk for the increasing rate scenario. d. Find the average annual holding period return under the scenario of interest rates increasing immediately and assuming any cash-flows received can be reinvest at the new interest rate. Redo part 5 assuming interest rates decreased 1%
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