Question
Can you provide the step by step process for using excel to get the answers? thanks Questions and Problems Section Problem #9 (Page 199) Calculating
Can you provide the step by step process for using excel to get the answers? thanks
Questions and Problems Section
Problem #9 (Page 199)
Calculating Real Rates of Return
If Treasury bills are currently paying 4.7 percent and the inflation rate is 1.9 percent, what is the approximate real rate of interest? The exact real rate?
Problem #19
Interest Rate RiskBoth Bond Bill and Bond Ted have 5.8 percent coupons, make semiannual payments, and are priced at par value. Bond Bill has 5 years to maturity, whereas Bond Ted has 25 years to maturity. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Bill? Of Bond Ted? Both bonds have a par value of $1,000. If rates were to suddenly fall by 2 percent instead, what would the percentage change in the price of Bond Bill be then? Of Bond Ted? Illustrate your answers by graphing bond prices versus YTM. What does this problem tell you about the interest rate risk of longer-term bonds?
Sprint Bonds:
A.What is the YTM of a Sprint Bond that has a 7.2% coupon, 20 years to maturity, is priced at $1025 and pays annually?
B.What is the YTM of Sprint Bond that has a 4.5% coupon, 30 years to maturity, is priced at $968 and pays semi-annually?
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