Question $14$

Suppose you have a $20$ year bond paying $8\%$ semiannual coupon, with face value of US $$100.$ Assuming that YTM is $7\%,8\%$ and $9\%,$ use the Excel PRICE function to calculate the bond price over time, that is$,$ as we approach maturity. As we approach maturity, what happens to the price of the bond?

Hint: Leaving the maturity date constant, change the settlement date by one year at a time toflect the passage of time.

Settlement date

Maturity date

Coupon rate

Face Value

Frequency of payments

Maturity $($years$)$

Market required yield

$\backslash$table$[[$Bond D$,$Bond E$,$Bond F$],[\frac{12}{7}\frac{?}{2015},\frac{12}{7}\frac{?}{2015},\frac{12}{7}\frac{?}{2015}$