Question
You have the bond with Yield to Maturity equal 2.9%. (Risk free rate is 0.5%, and credit risk is 2.4%). If the initial spread shrinks
You have the bond with Yield to Maturity equal 2.9%. (Risk free rate is 0.5%, and credit risk is 2.4%). If the initial spread shrinks by 0.3% a year from now, what will the price of your bond be trading at if the risk free rate is at 0.7%. The bond is semi-annul coupon bond.
Use PV funtion in excel. What do you have to input in rate, nper, pmt, and fv when using the PV funtion of Excel?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Introduction to Finance Markets, Investments and Financial Management
Authors: Ronald W. Melicher, Edgar A. Norton
16th edition
1119398282, 978-1-119-3211, 1119321115, 978-1119398288
