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Solution is needed in EXCEL format please (EXCEL formula needed) Example 1: Bond Pricing As with any financial instrument, the price of a bond is
Solution is needed in EXCEL format please (EXCEL formula needed)
| Example 1: Bond Pricing | ||||||||||
| As with any financial instrument, the price of a bond is just the present value of the future cash flows. What is the price of a bond with semiannual coupon payments and the following characteristics? | ||||||||||
| Coupon rate: | 8.00% | |||||||||
| Years to maturity: | 10 | |||||||||
| Yield to maturity: | 7.50% | |||||||||
| Par value: | $ 1,000 | |||||||||
| Since the bond has semiannual payments, the coupon payments will be: | ||||||||||
| Coupon payments: | ||||||||||
| Of course, we could have simply entered the coupon payments and par value in the same PV function, making sure that both were negative. This would give us: | ||||||||||
| Bond price: | ||||||||||
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Numerical Solution Of The American Option Pricing Problem Finite Difference And Transform Approaches
Authors: Carl Chiarella, Boda Kang , Gunter H Meyer
1st Edition
9814452610,9814452637
