Question: I need help with e), specifically how to do the data table (it's highlighted) please !! THANK YOU! A 20 -year, 8% semiannual coupon bond

I need help with e), specifically how to do the data table (it's highlighted) please !!

THANK YOU!

I need help with e), specifically how to do the data table(it's highlighted) please !! THANK YOU! A 20 -year, 8% semiannual coupon

A 20 -year, 8% semiannual coupon bond with a par value of $1,000 may be called in 5 years at a call price of $1,040. The bond sells for $1,100. (Assume that the bond has just been issued.) a. What is the bond's yield to maturity? b. What is the bond's current yield? \begin{tabular}{rlrll} Current yield & = ANNUAL COUPON & PRICE & & Hint: Write formula in words. \\ Current yield & =$80 & l & $1,100 & Hint: Cell formulas should refer to Input Section \\ \hline Current yield & =7.27% & & & (Answer) \end{tabular} c. What is the bond's capital gain or loss yield? Note that this is an economic loss, not a loss for tax purposes. d. What is the bond's yield to call? Here we can again use the Rate function, but with data related to the call. PeridodicYTC=AnnualizedNominalYTC=3.16%6.33%Thisisanominalrate,nottheeffectiverate.Nominalratesaregenerallyquoted. The YTC is lower than the YTM because if the bond is called, the buyer will lose the difference between the call price and the current price in just 4 years, and that loss will offset much of the interest imcome. Note too that the bond is likely to be called and replaced, hence that the YTC will probably be earned. NOW ANSWER THE FOLLOWING NEW QUESTIONS: e. How would the price of the bond be affected by changing the going market interest rate? (Hint: Conduct a sensitivity analysis of price to changes in the going market interest rate for the bond. Assume that bond will be called if and only if the going rate of interest falls below the coupon rate. That is an oversimplification, but assume it anyway for purposes of this problem.) Nominal market rate, r: Value of bond if it's not called: $1,000.00 Value of bond if it's called: $1,027.02 The bond would not be called unless rr & $1,000.00 & $1,027.02 & call likehood: \\ \hline \end{tabular} f. Now assume the date is 10/25/2019. Assume further that a 12%, 10-year bond was issued on 7/1/2019, pays interest semiannually (January 1 and July 1 ), and sells for $1,100. Use your spreadsheet to find the bond's Refer to this chapter's Tool Kit for information about how to use Excel's bond valuation functions. The model finds the price of a bond, but the procedures for finding the yield are similar. Begin by setting up the input data as shown below: \begin{tabular}{|l|r|r|} \hline & Basic info: \\ \cline { 2 - 3 } & 10/25/2019 & 7/1/2024 Call date \\ \hline Settlement (today) & 7/1/2029 & \\ \hline Maturity & 12% & \\ \hline Coupon rate & 110 & 104 Call price \\ \hline Current price (\% of par) & 100 & \\ \hline Redemption (\% of par value) & 2 & \\ \hline Frequency (for semiannual) & 1 & \\ \hline Basis (360 or 365 day year) & \end{tabular}

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