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!)

Please answer Questions 4 and 12 on page 89 of the textbook, and
solve Problems 22 and 27 on page 91 of the textbook. Complete your
answer in Word, Excel, or both.
4. For each of the following situations, identify whether a bond
would be considered a premium bond, a discount bond, or a par
bond.
A bond’s current market price is greater than its face
value.
A bond’s coupon rate is equal to its yield to maturity.
A bond’s...

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.

8) Assume that a bond has a coupon rate of 10 percent, makes
annual coupon payments, and has a par value of $1,000. Calculate
the bond’s value under the following conditions.
The bond matures in 5 years and the YTM is 5%:
The bond matures in 5 years and the YTM is 10%:
The bond matures in 5 years and the YTM is 15%:
The bond matures in 15 years and the YTM is 5%:
The bond matures in 15...

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?

(excel) Consider a 8% coupon bond
making annual coupon payments with 4 years until maturity
and a yield to maturity of 10%.
What is the modified duration of this bond?
If the market yield increases by 75 basis points, what is the
actual percentage change in the bond’s
price? [Actual, not approximation]
Given that this bond’s convexity is 14.13, what price would you
predict using the duration-with-convexity
approximation for this bond at this new yield?
What is the percentage error?

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?

Please show work so I can follow. Thank you.
Calculate the single and annual coupon payments assuming the
following:
Semiannual bond, Coupon rate of 8 percent, Par value of
$1,000:
Annual bond, Coupon rate of 4.5 percent, Par value of
$100:
Monthly bond, Coupon rate 12 percent, Par value $850:

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