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: Excel's Solver utilityr can also nd an optimum solution involving more than one variable. We will use Solver to nd the heat lit of

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: Excel's Solver utilityr can also nd an optimum solution involving more than one variable. We will use Solver to nd the heat lit of a su'aight line yield curve for some hand prices {more information on Solver is available in the previous assignment, or in the online tutorial). Youare tocalihrateaatraightline yieldeurvewhere yfr] = m+mr by nding appropriate values fury\" and m. The valueym is the semiannually compounding hond yield, or ERR, for ahondofmanirity t. The yield curve is to he the heat straight-line t for the following four bonds: Bond 1 has face value $111] andateamof l year with semiannual ooupons ofg'l andaprioeof$liiri Bond 2 has face value $111] andateamof [5 year with semiannual ooupmts uf: andaprioeof$li.41. Bond 3 has face value $111] and a team ofE year with a serniannual coupon of oil: and a price ofllll'll Eondtl has face value $111] andateamofj year witha serniannual coupon of 113% andaprice Ufa-[13.53. Creme a spreadsheet with headings similar to the following: a a I t'. ll E F a H I J I. 1 3 _ rl 1! m? intuit"? I G 'llen'l'. Face tot-inn Holocene; 'I'I'Eltl Headed-cc \"mum-e \"ms-aural 'J' .1 not! r t -v {Hm '3? we: casmre- .lt' trip-3 I 1.5 Sm ' I -'I' {Hill 'II who! illl'lII'I-l- 't' i 1 not! r 2 ? weed:- mm '.-' 1D 5 5m ' 2 'i" was erratum? 1" 11 11 m 13 =sul'llqll:l1l:|} 1.1 1!- In ooluntn G,you are to price the bond hosed on The yield from column F. Column H contains the actual price of the bond. Column I isthe difference between the two prioes, squared. In ce]1113,we have me sum ofme differences squared, and it is this value that we seelt to minimize. Use EsoeCI's Solver add-in to simultaneously solve for it]. and m to minimize the sum of the differences squared. {DJ What is the value for y\" found by Solver"!I lb) What is the value for as found by Solver? . lI Answer as a percentage ' correct to 1 ded rrllle , lI Amt-var as a percentage ' correct to J: ded rrllle Just Save Submit Problem #2 for Grading

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