Question: Please set up and solve using excel and label. 1)I own two bonds. Both have maturity values of 100 and mature in 5 years. Both
Please set up and solve using excel and label.
1)I own two bonds. Both have maturity values of 100 and mature in 5 years. Both have market rates of 9%.BondA has. annual coupon rate 8%, andBond Z is a zero coupon bond.
i) create a. table showing the price of each Bond each year as they approach mature. Rows should show 5,4,3,2,1, and 0 years left till maturity. Columns will have price of Bond A and Bond Z. Zero years should be considered the mature date(after interest has been paid but before mature value has been paid).
ii)What do you notice about the capital gains of the two bond types?
2)Eco inc.has just issued a 9 year bond with a coupon rate of 11%, payable semiannually. It has a par value of 1,000$ and was sold at 1,050$ matures at 1,000$. State your. answers in percentages in 3 decimals.
i)calculate the YTM(total yield)
ii)calculate the current yield(annual interest/price)
iii)calculate the capital gain of loss yield (total yield=current yield+/-the capital gain or loss yield)
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