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You have been given the following data on two bonds. A. Using the PRICE function, calculate the intrinsic value of each bond. Use an IF
You have been given the following data on two bonds. A. Using the PRICE function, calculate the intrinsic value of each bond. Use an IF statement to decide whether each bond is currently undervalued? B. Calculate the CURRENT YIELD of both bonds. C. Using the YIELD function, calculate the yield to maturity of each bond using the current market prices. D. Calculate the DURATION and MODIFIED DURATION of each bond. Settlement Date Maturity Date Coupon Rate Price Face Value Required Return Frequency Bond A 2/15/12 2/15/32 5.00% $890,00 $1.000.00 4.00% Bond B 2/15/12 2/15/17 7.50% $1,040.00 $1.000.00 8.00% Intrinsic Value Under/Over Valued Current Yield Yield to Maturity Duration Modified Duration E. Construct a line chart showing the relationship between yield and price for two bonds. Place Chart Here 1) Find the percentage change in the price of the bond under the scenarios below. Guide: You may find it easier to use the Bonds' values in your table above. % Change in Price Bond A Bond B Change in Yields -3.00% 3.00% Price A Price B Yield 0% 1% 2% 3% 4% 5% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20%
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