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1a. Calculate the price of a bond where the coupon rate is 5% (pays annually), the...

1a. Calculate the price of a bond where the coupon rate is 5% (pays annually), the market interest rate is 4%, and the life of the bond is 10 years.

1b. Suppose that you have an annual pay 7-year bond with a price of $1,100, paying a 4.5% coupon, with a face value of $1,000. What is the bond’s yield to maturity (YTM)?

1c. A bond sells for $900 today. Its coupon rate is 3%. The expected price in one year is $950. Based on the current price of $900, what is the bond’s current yield, expected capital gains yield, and expected total return?

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Home nert Page Layout Formulas Data Review View dd-Ins Cut E AutoSum Wrap Text aCopy в 1 프 . Ej-., Δ. : rーー 逻锂函Merge & Center. $, % , 弼,8 Conditional Format eCell Insert Delete Format Sort &Find & Format Painter Formatting as Table Styles2 Clear Clipboard Alignment Number Cells Edting BK26 BI BJ BK BL BM BN BO BP BQ BR BS BT BU BV 26 27 28 29 30 31 32 1a COUPON YTM LIFE PRICE OF BOND 5% 4% 10 YEARS $1,081.11 EXCEL-PV(4%,10-50-1000) 1b 45% COUPON LIFE PRICE 34 35 36 37 38 39 40 YEARS 1100 2.90% EXCEL-RATE(7,45, 1100,-1000) COUPON (C1) PO P1 CURRENT YIELD C1/PO- CAPITAL GAIN YIELD (P 1-PO)/P0= TOTAL RETURN-(P1 + C1-PO/PO- 3% 30 900 950 3.33% 5.56% 8.89% 42 43 (4 커 , Sheet2 . AFN BANKING NOTE BIDDING, UNDERWRITING / EUAC AW PM LIFE LP, lP, MRP, INFLATION YIELD WARRANTrefund bond CLEAN INVOICE PRICE ! Sheet1 02:54 06-01-2019

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