Carol Chastain purchases a one-year discount bond with a face value of $1,000 for $862.07. What is the yield of the bond?© BrainMass Inc. brainmass.com October 24, 2018, 10:37 pm ad1c9bdddf
Carol Chastain purchases a one-year discount bond with a face value of $1,000 for $862.07. What is the yield of the bond Kindly see the excel file also:
Yield of the bond will be ...
What is the yield of the bond in this case?
Spreedsheet Problem - Bonds and Stocks
7-8 Bond yields:
A 10-year, 12 percent 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 $1,100. (Assume that the bond has just been issued.)
a. What is the bond's yield to maturity?
b. What is the bond's current yield?
c. What is the bond's capital gain or loss yield?
d. What is the bond's yield to call?
7-22 Bond Valuation
Rework Problem 7-8 using a spreadsheet model. After completeing parts a through d, answer the following related questions.
e. How would the price of the bond be affected by changing interest rates? Hint: Conduct a sensitivity analysis of price to change in the yield to maturity, which is also the going market interest rate of interest falls below the coupon rate. That is an oversimplification, but assume it anyway for purposes of this problem.)
f. Now assume that the date is 10/25/2002. Assume further that our 12 percent, 10-year bond was issued on 7/01/2002, is callable on 7/01/2006 at $1,060, will mature on 6/30/2012, pays interest semiannually (January 1 and July 1), and sells for $1,100. Use your spreadsheet to find (1) the bond's yield to maturity and (2) its yield to call.
I need help with problem set 7-8 questions a through d in excel and problem set 7-22 e and f. No need to re-write the questions. Just show Question "a", Question "b"...Question "f" with excel.
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