Please answer the Q2.

Q1 already solved.

Q1 (PROBLEM SOLVED)

Suppose that on January 15, 2021 the following information about IBM corporate bond was obtained:

Issuer = IBM CORP

Maturity = 07/15/2029,

Coupon = 4.50% (Semiannual),

Price = 108.369 (% of Par Value),

YTM = 3.36%,

Last interest payment = 01/15/2021,

Next interest payment = 07/15/2021.

Using Microsoft's Excel, create a spreadsheet that shows the value of the bond after each interest payment, from 01/15/2021 to 07/15/2029. To makes things simple, assume that Par Value = $1000 and the YTM remains the same until the maturity. Use the function PV:

= - PV(rate,nper,pmt,fv,type)

where

rate = periodic interest rate (set it to YTM/2);

nper = total number of periods;

pmt = periodic payment;

fv = future value (set fv to 1000);

type = 0 (that is, payments are made at the end of each period).

Graph the value of the bond for each period.

Q2

As in Part 1, assume that the YTM remains the same until the maturity. Compute current yield (CY), capital gain/loss (CGL), and holding period return (HPR) of the bond after each interest payment, from 01/15/2021 to 07/15/2029. Express the three measures (CY, CGL, HPR) in annual terms (i.e., multiply periodic rate by 2) and graph them on the same plot