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PART D ONLY AND PLEASE SOLVE IN EXCEL AND SHOW FORMULAS PLEASE!!!!!! 2. The following table shows information about an Amazon.com bond as of July
PART D ONLY AND PLEASE SOLVE IN EXCEL AND SHOW FORMULAS PLEASE!!!!!!
2. The following table shows information about an Amazon.com bond as of July 19, 2017: Amazon.com Bond Information Settlement 7/21/2017 Maturity 12/5/2044 Coupon 4.950% Face Value 100 Given Price 118.691 Given Yield 3.840% Frequency 2 a) Determine the value of the bond and its current yield. Also find whether the bond is undervalued, overvalued, or fairly valued compared to the given price. b) Calculate the yield to maturity using the YIELD function and find the duration, modified duration, and convexity of the bond. c) Determine the percentage change in price if market rates decline by 1%. Determine the actual relative change in bond prices using the intrinsic values for each rate. Compare this result with those obtained using the formulas with the modified duration only and with the modified duration and convexity together d) Create a chart that shows the relationship of this bond's convexity to the coupon rate. Use a rate of 1% to 15% in calculating the convexity Step by Step Solution
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