Specifically need help with D$,$ E$,$ F$,$ I've already answered A$,$B$,$C$.$

Submit your solutions as an Excel document. Be sure to clearly label the

various parts of the problem.

Consider the following two bonds that make semi$-$annual coupon payments. Assume

the first coupon payment occurs in exactly six months, and the bond has a face value of

$$1000.$

a$.)$ What is the current price $(t=0)$ of Bond A$?$ Be sure to set up the valuation

equation.

b$.)$ What will be the price of Bond A exactly halfway in between $t=0$ and the first

coupon date?

c$.)$ Using a spreadsheet, plot the price$-$yield relationship for both Bond A and Bond B

on the same set of axes. Do this for a range of yields from $2\%$ to $11\%($in

increments of $50$ basis points$).$

d$.)$ Use a spreadsheet to compute the annualized Macaulay duration and modified

duration for Bond A at a yield$-$to$-$maturity of $3\mathrm{.}6\%.$ Provide an interpretation of

the modified duration with regards to maturity and interest rate risk.

e$.)$ Use a spreadsheet to calculate the annualized convexity measure of Bond A at a

YTM of $3\mathrm{.}6\%.$

f$.)$ Using the duration approximation formula with a convexity adjustment, what

percentage change in the price of Bond A would you expect if the yield decreases

by $150$ basis points?