In order to answer the next three questions, use the following template:

a$.$ Assume you buy $$100$ Face Value of bonds

i$.$ Cash flow in year $0($i$.$e$.,$ when you make the investment $)$ is the $$100$ Bonds $x$ price. Note this is

entered as a negative number. All other numbers are entered as positive.

ii$.$ Each time period thereafter is the coupon $\frac{100}{2}.$ Your divide by $2$ because the coupon is paid

every six months.

iii. The last time period $($i$.$e$.,$ when the bonds is repaid$)$ is the semi annual coupon $+$$$100$ face value

of the bonds $+$ any call or make whole payment

iv$.$ Once you have inputted all the cash flows in Excel, use the IRR formula to calculate the

semi$-$annual yield. The annual yield is just semi$-$annual yield multiple by $2.$

v$.$ Note for each question below you need to run this table $5$ times with different assumption on

when the bonds is paid down