Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please explain how to solve for Column C PV(CF). If possible, show in excel Inputs 2 Settlement date 3 Maturity date 4 Annual coupon rate

Please explain how to solve for Column C "PV(CF)". If possible, show in excel

image text in transcribed

Inputs 2 Settlement date 3 Maturity date 4 Annual coupon rate 5 Yield to maturity | 6 Coupon payments per year 7 Redemption value (% of par value) | 8 Par value C D Formulas in column B 12/31/1995 =DATE(1995, 12,31) 6/30/2002 =DATE(2002,6,30) 0.07 0.06 2 100 $1,000 $1,053.17 =(PRICE(B2,B3,B4,B5,B7,B6)/100)*B8 10 Price (in dollars) 11 12 No. of semi-annual periods to maturity 13 No. of years to maturity 14 15 16 Time (1) 13 6.5 =COUPNUM(B2,B3, B6) =B12/2 Cash flow PV(CF) t + t2 (t + t^2) x PV(CF) 1 2 6 33.981 32.991 32.030 31.097 30.191 29.312 28.458 27.629 26.825 26.043 25.285 24.548 704.785 67.961 197.945 384.359 621.941 905.739 1231.102 1593.659 1989.311 2414.213 2864.762 3337.586 3829.534 1 28270.804 10 11 12 13 56 72 90 110 132 156 182 35 35 35 1,035 Sum: 147708.917 Semi-annual Convexity Annualized Convexity | 132.2001 33.0500 E32/(B10*(1 +(B5/2)^2) =E34/4 0.05] =B37-B5 5.2104 (from part (b)) 34 35 36 37 New yield to maturity 38 Change in yield | 39 Modified duration 40 Proportionate price change: | 41 |Using modified duration | 42 |Using modified duration and convexity 43 44 Percentage price change: 45 Using modified duration 46 Using modified duration and convexity I -0.2605=-B39"B38 -0.2192=-B39*B38+(0.5 E35*(B3842)) -26.05] =B41*100 -21.92 =B42*100

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions