Question: Please answer using excel and show formulas. ? ? ? ? ? ? ? ? ? ? 1 Input 2 Bond X: 3 Coupon rate

Please answer using excel and show formulas.

? ? ? ? ? ? ? ? ? ? 1 Input 2 Bond X: 3 Coupon rate 4 Face value 5 Coupons per year 6 Years to maturity 7 Current price 8 9 Bond Y: 10 Coupon rate 11 Face value 12 Coupons per year 13 Years to maturity 14 Current price 15 16 17 Calculation & Output 18 Question 7 19 Increase in interest rate 20 New YTM 21 New Price of Bond X 22 New Price of Bond Y 23 24 % change in Bond X 25 % change in Bond Y 26 27 28 Fall in interest rate 29 New YTM 30 New Price of Bond X 31 New Price of Bond Y 32 33 % change in Bond X 34 % change in Bond Y GEM, Inc., has two bonds outstanding in the market. Both Bond X and Bond Y have 7 percent coupons, make semiannual payments, and are priced at par value. Bond X has 20 years to maturity, whereas Bond Y has five years to maturity. If interest rates suddenly rise by 2 percent (percentage points), what is the percentage change in the price of the two bonds? What if it falls by 2 percent instead? 2.0% ? ? ? ? ? 2.0% O

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