YTM can also be calculated directly in the spreadsheet using the function=YIELD (Al, A2, An) where n

Question:

YTM can also be calculated directly in the spreadsheet using the function=YIELD (Al, A2, An) where n is the last cell with inputs for the problem. The user inputs settlement date, date, rate, current bond price, value and the number of coupons paid per year. You can set the settlement date as the current date, and the date as the same month and day in the year of (five years from now, eight years from now, etc.) Price is stated as a percentage of par (e.g., 100 = $1,000). The following format solved the ytm for the bond in Example 17—3.

1/1/2007 Settlement date = YEAR (year, month, day)*
1/1/2010 Maturity date = YEAR (year, month, day)*
0.1 Annual rate
105.242 Bond price
100 Face value = payments per year
0.08 Yield to as a decimal
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...