Question
Problem 4: (20pts) You've decided to add government bonds to your portfolio as a way to add low-risk investments. On 12/01/2022, you purchase the 5%
Problem 4:
(20pts) You've decided to add government bonds to your portfolio as a way to add low-risk investments. On 12/01/2022, you purchase the 5% coupon bond maturing in February 15th, 2028. The bond pays coupons twice a year -- in February 15th and August 15th. The current bond price is $99.50. Par value of the bond is $100.
a) Use the XIRR function to compute the YTM on this bond. Don't forget accrued interest.
b) Use a data table to demonstrate how the bond price influences the YTM. Place YTM on the X axis, place price on the Y. What does this chart show about the relationship between yield and price?
PLEASE ANSWER QUESTION FULLY AND GIVE THE RIGHT RESPONSE MY WHOLE CLASS DEPENDS ON IT (Answer all parts please).
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