Question: Make an excel spreadsheet answering the following question A 3 0 - year maturity bond has a 7 % coupon rate, paid annually. It sells
Make an excel spreadsheet answering the following question
A year maturity bond has a coupon rate, paid annually. It sells today for $ A year maturity bond has a coupon rate, also paid annually. It sells today for $ A bond market analyst forecasts that in five years, year maturity bonds will sell at yields to maturity of and that year maturity bonds will sell at yields of Because the yield curve is upwardsloping, the analyst believes that coupons can be invested in shortterm securities at a rate of
a Calculate the expected rate of return of the year bond over the
fiveyear period.
b What is the expected return of the year bond?
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