2. You have decided to evaluate the following bonds to include in your portfolio:

Bond 1 Bond 2 Bond 3

Settlement Date 3/15/2012 9/1/2012 7/15/2012

Maturity Date 1/15/2022 7/1/2032 9/15/2042

Frequency 4 2 2

Face Value $1,000 $1,000 $1,000

Coupon Rate 7.00% 9% 12%

Required Return 9.00% 12% 14%

Given Price $900 $1100 $1000

A. Find the price of these bonds

B. Determine the yield to call on these bonds if the time to first call and the call premium for each one of them are the following:

Bond A Bond B Bond C

Call Premium % 2.00% 3.00% 4.00%

Call Date 7/15/2015 9/1/2017 1/15/2016

C. Determine the duration and modified duration of these bonds.

D. Also find whether the bond is undervalued, overvalued, or fairly valued compared to the given price. Use a conditional statement for this.

(This needs to be done in Excel)