Question: Please show excel formulas The following table gives Treasury zero rates and cash flows on a Treasury bond. Assume the zero rates are continuously compounded.
| Please show excel formulas The following table gives Treasury zero rates and cash flows on a Treasury bond. Assume the zero rates are continuously compounded. | |||||||
| Maturity (years) | Zero rate | Coupon payment | Principal | PV of cash flows | |||
| 0.5 | 2.0% | $20 | |||||
| 1.0 | 2.3% | $20 | |||||
| 1.5 | 2.7% | $20 | |||||
| 2.0 | 3.2% | $20 | $1,000 | ||||
| Find the present value of the cash flows (coupon payment and principal) for each period. | |||||||
| What is the bond's theoretical price? | |||||||
| What is the bond's yield-to-maturity (expressed with semiannual compounding)? | |||||||
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