Question: How do you solve using Excel? (step-by-step solutions) 1.1. Find the value of a bond which has coupon rate of 10% and pays coupon semi-annually

How do you solve using Excel? (step-by-step solutions) 1.1. Find the

How do you solve using Excel? (step-by-step solutions)

1.1. Find the value of a bond which has coupon rate of 10% and pays coupon semi-annually 2 The bond will mature in 5 years and the appropriate discount rate for the bond is 12%. 3 The face value of the bond is $100. In this case we will assume that the yield curve is flat. 4 5 PMT 6 NPER 7 RATE (VY) 8 FV = 9 PV = 10 11 Q2. A semi-annual paying bond is trading at $105. The stated coupon rate is 9% per annum. The Face Value of bond is $100 12 The bond will mature in 10 years. Compute Yield to Maturity 13 14 PMT= 15 NPER 16 FV = 17 PV 18 YTM 19 20 21 22 03. A bond trader purchased each of the following bonds at yield to maturity of 8%. 23. Immediately after she purchased the bonds, interest rates fell to 7%. What is the 24 percentage change in the price of each bond after the decline in interest rates? Fill in the following table: 25 26 Price @8% Price @ 7% Percentage Change 27 10 year 10% annual coupon 28 10-year zero coupon 29 5-year zero coupon 30 year zero coupon Perpetuity 5100 annual coupon 32 33 30 31

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