Question: Please solve in excel and show formulars. Question 2 [40 points]: Note: You are allowed to access the hyperlinks to FINRA Morningstar included in the
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Please solve in excel and show formulars.
Question 2 [40 points]: Note: You are allowed to access the hyperlinks to FINRA Morningstar included in the question. The following Microsoft bond has a coupon rate of 5.2%. Identify the Last Trade Yield. Would you expect this bond to be trading at a premium or a discount? Why? [10 points) Look at the Price/Yield chart on the hyperlinked page. What is the current bond price? The par/offer price was $100. Is this bond trading at a premium or a discount? How can you tell? [10 points] What is the difference between the coupon rate and the yield on this bond (i.e., what do they mean for the investor who purchased/held the bond)? [10 points) FINRA Morningstar documents the yield curve, which shows the maturity and yield (in %) for various treasury bonds. The yield curve is found on the "Market At-A-Glance" tab in the Bond Yield and Performance At-A-Glance section - "Treasury Yield". The graph on the right depicts this as a line graph for current compared to 1 year ago. What do you notice about the relationship between maturity and yield? Which of the bonds has the most interest rate risk? Why? [10 points) Note: Watch the FINRA Training video in the Course Resource Module. . Question 2 [40 points]: Note: You are allowed to access the hyperlinks to FINRA Morningstar included in the question. The following Microsoft bond has a coupon rate of 5.2%. Identify the Last Trade Yield. Would you expect this bond to be trading at a premium or a discount? Why? [10 points) Look at the Price/Yield chart on the hyperlinked page. What is the current bond price? The par/offer price was $100. Is this bond trading at a premium or a discount? How can you tell? [10 points] What is the difference between the coupon rate and the yield on this bond (i.e., what do they mean for the investor who purchased/held the bond)? [10 points) FINRA Morningstar documents the yield curve, which shows the maturity and yield (in %) for various treasury bonds. The yield curve is found on the "Market At-A-Glance" tab in the Bond Yield and Performance At-A-Glance section - "Treasury Yield". The graph on the right depicts this as a line graph for current compared to 1 year ago. What do you notice about the relationship between maturity and yield? Which of the bonds has the most interest rate risk? Why? [10 points) Note: Watch the FINRA Training video in the Course Resource Module
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