Question: please answer using excel and show work thank you AFF 210 PROBLEM SET ONE WINTER 2022 PROBLEM FOUR (15 MARKS) On December 31, 2016 you
AFF 210 PROBLEM SET ONE WINTER 2022 PROBLEM FOUR (15 MARKS) On December 31", 2016 you decided to buy a 30-year Government of Canada bond. The bond had a face value of $1,000,000. The coupon rate on the bond was 5%, Coupons were paid semi-annually. On December 31", 2016 the yield to maturity on Government of Canada bonds was 3.40% per year. (The term structure of interest rates was flat.) After holding the bond for 5 years you decided to sell the bond on December 31", 2021. Prior to selling the bond you received the December 31", 2021 coupon payment. On December 31", 2021 the yield to maturity on Government of Canada bonds had decreased to 2.10% per year. (The term structure of interest rates was flat.) a) How much did you pay for the bond on December 31st, 2016? b) How much did you sell the bond for on December 31st, 2021? c) What was the effective annual rate of return that you earned on your investment during the 5 years
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