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Problem 3 (5 points extra credit) In this problem we will further investigate the Bond Investment problem from problem 3 by performing a parameter analysis.

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Problem 3 (5 points extra credit) In this problem we will further investigate the Bond Investment problem from problem 3 by performing a parameter analysis. First. we will look at how decreasing risk through diversication impacts the total return. We will do this by evaluating different settings on the Max per Bend setting. I Convert the Max per Bond cell into a parameter that varies from 1.500 to 5.00-8- I Generate a Parameter report with 8 steps that tracks the Discounted Cash Flow as an output. I Paste the report into your template. Now we will look at how smoothing out the cash ow effects the total return. I Keep the Mexpar Bond setting as a parameter. ' Convert the Initial Cash Required setting to a parameter that varies from 5i],ilil to mean. a Generate a parameter report that includes 8 major axis points, and 11 minor axis points, and tracks the Disc Cashow. Select Vary Two Selected Parameters Independently. Paste the report into your template. 0 Generate a parameter graph for the same settings and paste the graph into the template. Consider this analysis and I Comment on how you think the time to solve would ehange if we increased the number of bonds to choose from? How could the analyst address this issue? :- Comment on what observations you can make from this sensitivity analysis

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