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Consider two bonds A and B with payments , where . Bond A has just been issued. Its face value is $ 1 , 0
Consider two bonds A and B with payments where Bond A has just been issued. Its face value is $ it bears coupon rate of and it will mature in years. Bond B was issued years ago. This bond has $ face value and bears a coupon rate. When issued, this bond had a year maturity, so its remaining maturity is years. The yield to maturity for both bonds is see Cell B in the spreadsheet below Using the Excel spreadsheet below write and explain the Excel formula used to calculate bond A and bond B prices in Cells B and E respectively:
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