Question
Kindly assist with Excel formulas for the following problems: 13. Assume it is now January 1, 2000, and someone offers the following deal: starting from
Kindly assist with Excel formulas for the following problems: 13. Assume it is now January 1, 2000, and someone offers the following deal: starting from the year 2000, you will be paid each year the amount of dollars equal to the year, i.e., $2000, $2001, $2002, .... until year 3000 inclusive. If payments occur at the year end and the interest rate remains at 10%, what is the PV of such a deal? What is the PV if the payments covers only the years from 2000 to 2050 inclusive? What can you conclude for the comparison? 14. When you use the effective annual yield on a semi-annual coupon bond to price the corresponding annual coupon bond, do you get the same price?
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