Using the spreadsheet eaxmple below. Calculate the duration for a Bond with a face value of $1000, coupon rate of 7.5% paid annually, yield of 9% and maturity of 6 years.

3.- Using the bond in (2) , calculate how many bonds you need to pay a liability at the end of year 5 of $16878.

4.- Explain why you are "immune" to changes in rates for that payment. Includes different rates and results (using pics from the spreadsheet).

5.- Compare the results found in (4) using a (any) Bond with different duration.

1.528965 FV Coupon Yield Maturity 1000 7.50% 3% In Year 4 we need to pay 3585 CF DF CF DF CF DF t FV PV 1 75 0.9174 75 0.8417 75 0.7722 75 0.7084 75 0.6499 10750.5963 68.8073 68.8073 97.1272 63.1260 126.252089.1075 57.9138 173.7413 81.7500 53.1319212.5276 75.0000 48.7449 243.7243 342.9847 973.6133 1316.5980 4 68.8073 904.8060 6 640.9874 3845.9243 932.7112 4670.9767 2.722926801 Duration5.007956 1.528965 FV Coupon Yield Maturity 1000 7.50% 3% In Year 4 we need to pay 3585 CF DF CF DF CF DF t FV PV 1 75 0.9174 75 0.8417 75 0.7722 75 0.7084 75 0.6499 10750.5963 68.8073 68.8073 97.1272 63.1260 126.252089.1075 57.9138 173.7413 81.7500 53.1319212.5276 75.0000 48.7449 243.7243 342.9847 973.6133 1316.5980 4 68.8073 904.8060 6 640.9874 3845.9243 932.7112 4670.9767 2.722926801 Duration5.007956