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Q1. (8pts): Consider a 5 -year, 6.0% corporate bond with payments made semi-annually. The face amount of the bond is $1000. The yield to maturity

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Q1. (8pts): Consider a 5 -year, 6.0% corporate bond with payments made semi-annually. The face amount of the bond is $1000. The yield to maturity for the bond is equal to 150 bps spread over the 5 -year risk-free rate of 4.0% ? A. Using the Excel Finance functions only using clearly labeled inputs and reference driven formulas; answer: i. What is the dollar price of the bond? ii. What is the price as a percent of par? B. Using manual implementation of the cashflow generation techniques in Excel shown in class whereby you explicitly generate each of the relevant cashflows (coupon interest payments, principal payments and total payments), the periods in which the cashflows are received, and the correctly selected and discounted values; answer: i. What is the dollar price of the bond? ii. What is the price as a percent of par? (Hint: Obviously your answers to A and B should be the same, though you arrive at those answers through implementing different techniques in Excel.)

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