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Construct a spreadsheet that will compute zero coupon bond prices and 1 period forward rates given spot rates; compute spot rates and 1 period forward
Construct a spreadsheet that will compute zero coupon bond prices and 1 period forward rates given spot rates; compute spot rates and 1 period forward rates given zero coupon bond prices; compute spot rates and zero coupon bond prices given forward rates. See SS2Template spreadsheet. a) Given the following table of spot rates, use your spreadsheet to compute the zero coupon bond prices and the 1 period forward rates. b) Sanity check your spreadsheet by showing that if you take the zero coupon bond prices you computed in part a) as given, and used them to compute the spot rates and the 1 period forward rates, you would get the same answers. (Just like in the template spreadsheet.) c) Sanity check again by starting with the 1 period forward rates from part a) and computing the spot rates and zero coupon bond prices. Construct a spreadsheet that will compute zero coupon bond prices and 1 period forward rates given spot rates; compute spot rates and 1 period forward rates given zero coupon bond prices; compute spot rates and zero coupon bond prices given forward rates. See SS2Template spreadsheet. a) Given the following table of spot rates, use your spreadsheet to compute the zero coupon bond prices and the 1 period forward rates. b) Sanity check your spreadsheet by showing that if you take the zero coupon bond prices you computed in part a) as given, and used them to compute the spot rates and the 1 period forward rates, you would get the same answers. (Just like in the template spreadsheet.) c) Sanity check again by starting with the 1 period forward rates from part a) and computing the spot rates and zero coupon bond prices
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