Question

Please show how to solve using **EXCEL** ONLY.

**10**. Calculate the duration of a $1,000, 12‐year
zero coupon

bond using annual compounding and a current market rate

of 9 percent.

**12.** Calculate the duration for a $1,000, 4‐year
bond with a

4.5 percent annual coupon, currently selling at par. Use the

bond’s duration to estimate the percentage change in the

bond’s price for a decrease in the market interest rate to

3.5 percent. How different is your answer from the actual

price change calculated using Equation 5.6?

Answer #1

10)

Please show how to solve using EXCEL ONLY
EXCEL INSTRUCTIONS ONLY
8. David Hoffman purchases a $1,000 20‐year
bond with an
8 percent coupon rate (annual payments). Yields on comparable
bonds are 10 percent. David expects that, 2 years from
now, yields on comparable bonds will have declined to 9
percent.
Find his expected yield, assuming the bond is sold
in 2 years.

PRICING ZERO COUPON BONDS -
(a) Calculate the price of a zero coupon, $1,000 face value,
5-year bond if the appropriate annual discount rate is 12 percent.
Calculate your total return if you hold this bond for three years
and the discount rate does not change. (INCLUDE FORMULAS USED TO
SOLVE PROBLEM IN EXCEL).
EXPECTED RETURN ON T-BILLS -
(b) What is the actual expected return on a US government
12-month, T-bill that is priced at $990, assuming its face...

Calculate the duration of a two-year, $1,000 bond that pays an
annual coupon of 10 percent and trades at a yield of 14 percent.
What is the expected change in the price of the bond if interest
rates decline by 0.50 percent? (2 points)? (show all the work!)

In Excel with formulas--
A 10-year, 12 % semiannual coupon bond with a par value of
$1,000 may be called in 7 years, at a call price of $1,100. The
bond sells for $1,500. (Assume the bond has just been
issued).
a. What is the bond’s yields to maturity?
b. What is the bond’s current yield?
c. What is the bond’s capital gain or loss yield in the first
year?
d. What is the bond’s yield to call?

General Mills has a $1,000 par value, 10-year to maturity bond
outstanding with an annual coupon rate of 7.89 percent per year,
paid semiannually. Market interest rates on similar bonds are 11.30
percent. Calculate the bond’s price today.

Show all work please.
a) What is the duration of a four-year semiannual coupon bond
with a 6 percent coupon rate selling at par?
b) What is the duration of a three-year semiannual coupon bond
with a 6 percent coupon rate selling at par?
c) What is the duration of a two-year semiannual coupon bond
with a 6 percent coupon rate selling at par?
d) Using these results, what conclusions can you draw about the
relationship between duration and maturity?

A two-year corporate bond has a coupon rate of 4 percent. The
one-year spot rate is 3 percent and the forward rate is 5 percent.
The bond’s credit spread is 1 percent for both the one-year and the
two-year maturities
a. What is the price of the bond expressed as a percentage of
its face value?
b. What is the bond’s yield to maturity?
c. What is the bond price calculated with the bond’s yield to
maturity?
d. Calculate the...

1)There is semiannual compounding bond. What would the YTM be on
a 10-year, zero coupon, $1,000 par value bond that is currently
trading at $551.4?
2)Allie Benson observes Samsung 8.25%, 6-year, annual-pay bond
trading at 104.34% of par (where par is $100). The bond is callable
at 102 in three years. What is the bond’s yield-to-call?
3)A 12-year, 9% annual-pay bond has a par value of $1,000. What
is the price of the bond if it has a yield-to-maturity of...

The market price of a bond is $900 for a 10-year bond that pays
interest semi-annually at a coupon rate of 6% per annum. What is
the bond’s expected return, stated on an annual basis compounded
semi-annually? What is the bond’s expected return, stated on an
annual basis compounded annually? Show steps on how to
solve using excel and the formulas used as well as manually how to
solve it

A 10-year, 12 % semiannual coupon bond with a par value of
$1,000 may be called in 4 years, at a call price of $1,060. The
bond sells for $1,300. (Assume the bond has just been
issued).
a. What is the bond’s yields to maturity? (15 points)
b. What is the bond’s current yield? (15 points)
c. What is the bond’s capital gain or loss yield in the first year
in percent? (15 points)
d. What is the bond’s yield...

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