Question: Use VBA to solve Create a user-defined function to solve for a bond's price using a FOR loop to discount cash flows. The price (PV)

Use VBA to solve
 Use VBA to solve Create a user-defined function to solve for

Create a user-defined function to solve for a bond's price using a FOR loop to discount cash flows. The price (PV) of a bond is the present value of all of its future cash flows. We can use a FOR loop to discount all coupon payments: . We can use the following formula: xCRxPar XCRX Par Par PV bond + + ... + XCRX Par + (1+y/m) (1 + y/m) (1 + y/m) (1 + y/m) Where: CR denotes the coupon rate (annual rate) y denotes the bond's yield T denotes the number of years to the bond's maturity date (i.e., redemption) Par denotes the par value (face value) of the bond m denotes the coupon payment frequency . Hints: To discount the coupon payments, your For loop should be an accumulation of: (1/m x Par x CR) X (1+y/m) - Where t is the iteration number. Later, you can add the discounted par (face) value to your accumulation of discounted coupon payments. aid semi-annually

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!