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Formulas ( f ) Create formulas that only refer to the cells in Step 1 to find the clean dollar price and yield to maturity
Formulas
f Create formulas that only refer to the cells in Step to find the
clean dollar price and yield to maturity for Cells E:E
g Create formulas that only refer to the cells previously created to
find the durations for Cells E:E
h Your formulas will automatically populate in Cells B:B for my
use in grading.
i Change the number formats for your entries to best display the
information.
Step : Sensitivity Example
j Cell H will have an alternate yield to maturity.
k Create formulas for Cells H:H that use the bond base
information, the current date Cell E and this yield to maturity H
to compute the clean dollar price and modified duration.
l Cell H displays a change in interest rates.
m Create formulas for Cells H:H that use the bond base
information, the current date Cell E and the information in Cells
H:H to find the new yield to maturity, the new clean dollar price,
the actual percentage change in the prices, and the expected
percentage change in the price based on the modified duration Cell
H
n Your formulas will automatically populate in Cells B:B for my
use in grading.o Change the number formats for your entries to best display the
information.
Step : Solver Example
p The current and maturity dates and yield to maturity from your
original work will populate in Cells K:K
q Use the Solver tool to find the coupon rate Cell K for this bond
to have the same interest rate risk Modified Duration as your
original work.
r Hint: This will mean that Cell K will be equal to or very close to
Cell E
s Your formula for the modified duration will appear in Cell B for
my use in grading.
t Change the number formats for Cells K:K to best display the
information.
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