Question
You've decided to add government bonds to your portfolio as a way to add low-risk investments. On 12/01/2022, you purchase the 5% coupon bond maturing
You've decided to add government bonds to your portfolio as a way to add low-risk investments. On 12/01/2022, you purchase the 5% coupon bond maturing in February 15th, 2028. The bond pays coupons twice a year -- in February 15th and August 15th. The current bond price is $99.50. Par value of the bond is $100.
a) Use the XIRR function to compute the YTM on this bond. Don't forget accrued interest.
b) Use a data table to demonstrate how the bond price influences the YTM. Place YTM on the X axis, place price on the Y. What does this chart show about the relationship between yield and price?
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