Question
I have this question i struggled with along with few other similar questions. my teacher had excel set up for students but it seem confusing
I have this question i struggled with along with few other similar questions. my teacher had excel set up for students but it seem confusing especially with dates. so i copied and pasted along with screenshot of excel so can you show me how to solve this from start to end and how to fill the boxes correctly so i can use this as a support aid to try to do other questions on my own.
Both bond bill and bond ted have 5.8& coupons, make semiannual payments, and are priced at par value. bond bill has 5 years to maturity while bond ted has 25 years to maturity. if interest rates suddenly rise by 2%, what is the percentage change in the price of bond bill and bond ted? both bonds have a pair value of $1,000. if raes 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?
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