Question

4. What is the yield-to-maturity of a corporate bond that has face value of $1,000, annual coupon payments of $35, is being quoted at 102.5, and has seven years left to maturity? hint: You need to use the Excel RATE function.

Answer 1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

BOND - Microsoft Excel (Product Activation Failed) Add-Ins View - 2x General Dr Wrap Text s FMerce Merge & Center Center Alignment E 4.0 .00 8. File Home Insert Page Layout Formulas Data Review % Cut Calibri -11AA = = = Ea Copy Paste B I Format Painter U D A E E E E Clipboard Font DI13 DH DI Insert Delete Format $ - % % Number Conditional Format Formatting as Table Styles Cell Styles Σ AutoSum : A Fill Sort & 2 Clear Filter Editing Find & Select Cells DG DJ DK DL DM DNDODPDQ DR DSDT DU ANNUAL COUPON BOND FACE VALUE 1000 35 BOC van AWNE COUPON ($) YEARS PRICE 1025 [102.5% X 1000] YTM= 3.10% (=RATE(D16,-D15, D17,-D13)] 12 13 16 17 19 20 H Rea Sheet2 AFN BANKING NOTE 51 53 CLEAN PRICE s1o BIDDING, UNDERWRITING EUAC AW LIFELP, IP, MRP, INFLATION I YIELD SPOT 1 ferences WARRANT refund 54 55 56 I |00120% 9 . * o OENG 25-11-2019