D E G H F. Now assume the date is 10/25/2014. Assume further that a 12%, 10-year bond was issued on 7/1/2014, Days interest semiannually (January 1 and July 1), and sells for $1,100. Use your spreadsheet to find the Refer to this chapter's Tool Kit for information about how to use Excel's bond valuation functions. The model finds the price of a bond, but the procedures for finding the yield are similar. Begin by setting up the input data as shown below: Settlement (today) Maturity Coupon rate Basic info: 10/25/2014 7/1/2024 7/1/2020 Call date
D E G H F. Now assume the date is 10/25/2014. Assume further that a 12%, 10-year bond was issued on 7/1/2014, Days interest semiannually (January 1 and July 1), and sells for $1,100. Use your spreadsheet to find the Refer to this chapter's Tool Kit for information about how to use Excel's bond valuation functions. The model finds the price of a bond, but the procedures for finding the yield are similar. Begin by setting up the input data as shown below: Settlement (today) Maturity Coupon rate Basic info: 10/25/2014 7/1/2024 7/1/2020 Call date
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Please do stepwise and correct please ill like.. and use excel given formulas only.
Transcribed Image Text:A
B
D
E
G
H
1 f. Now assume the date is 10/25/2014. Assume further that a 12%, 10-year bond was issued on 7/1/2014,
2 pays interest semiannually (January 1 and July 1), and sells for $1,100. Use your spreadsheet to find the
3
Refer to this chapter's Tool Kit for information about how to use Excel's bond valuation functions. The model finds the
5 price of a bond, but the procedures for finding the yield are similar. Begin by setting up the input data as shown below:
9 Maturity
OCoupon rate
Settlement (today)
Current price (% of par)
2 Redemption (% of par value)
3 Frequency (for semiannual)
Basis (360 or 365 day year)
D
6
Yield to Maturity:
06
17
Basic info:
10/25/2014
7/1/2024
Deadu
12%
1100
1000
2
1
Build a Model Solution
3
To find the yield to call, use the YIELD function, but with the call price rather than par value as the
0 redemption
1
2 Yield to call:
7/1/2020 Call date.
Hint: Use the Yield function. For dates, either refer to cells D122 and D123, or enter the
3
4 You could also use Excel's "Price" function to find the value of a bond between interest payment dates.
15
1040 Call price
Sheet2 Sheet3
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