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Jse a FINANCIAL calculator and please show work: 1. Estimate the IRR of following project using a trial-and-error approach. Tip: start with a 10% rate,

image text in transcribed Jse a FINANCIAL calculator and please show work: 1. Estimate the IRR of following project using a trial-and-error approach. Tip: start with a 10% rate, if the NPV is positive then use 15%, if it is negative then try 5%. Iterate three times (First =5%, then 2,5% and finally =1,25%). 2. A Treasury bond has a fix coupon rate of 15%(150), a face value of 1.000 and matures 3 years from today. If now is traded at 952 then calculate: a. Yield to maturity (IRR is asked). Explain your answer. b. Duration using the yield to maturity as the discount rate (Modified Duration). c. What happens with bond's price if you can buy treasury bonds at an interest rate of 11% ? Comment your answer. Using: Duration(b)Macaulay=kBondPrice(n)(PVofCashFlows) n is the number of periods until each cash flow is paid. k is the number of times coupon interest is paid per year. Duration(D*)Modified=(1+yield/k)MacaulayDuration yield is the yield-to-maturity of the bond. k is the number periodic payment (compounding) periods per year

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