Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A 3 year bond with semiannual coupons of 13% has a yield of 18.92%. You are to use Excel's SumProduct function to compute the

image text in transcribed 

A 3 year bond with semiannual coupons of 13% has a yield of 18.92%. You are to use Excel's "SumProduct" function to compute the duration of this bond. Given two ranges of values, "SumProduct" computes their dot product. Create a table as shown, with entries appropriate to your bond, replacing the question marks with appropriate formulas. 1 2 23 A B D E Face Coupon Yield 4 5 100 6 Time Cash Flow Present Value 7 Coupon 1 0.5 ? ? 00 Coupon 2 1 ? ? 9 10 11 12 Coupon 3 1.5 ? ? Coupon 4 2 ? ? Coupon 5 2.5 ? ? 13 14 Coupon 6 Redemption 3 ? ? 3 100 ? In a single cell, use the functions "SumProduct" and "Sum" to compute the duration of this bond using only the cells shown above. (a) What is the duration of this bond? (b) What formula using the functions SumProduct and Sum (and using 37 characters or less) calculates this Win duration? Go to Settings to

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Face Coupon Yield value 100 013 01892 R2 0065 00946 SUMPRODUCTBC12... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Investments

Authors: Zvi Bodie, Alex Kane, Alan J. Marcus

9th Edition

73530700, 978-0073530703

More Books

Students also viewed these Programming questions