Description
- Recently, there have been some signs of inflation and the consensus is building that interest rates in the U.S. are lkely to rise over the next year or so. If that actually happens, which investors would suffer larger losses, those invested in 10-year U.S. Treasuries or those invested in 30-year U.S. Treasuries? Explain your reasoning.
- Please create an Excel file with the calculated answers to the questions in the Excel homework for this week. The questions are listed in the attached PDF file.
Calculate the value of a fixed rate bond with fifteen years left to maturity, annual coupon payments at a coupon rate of 5.0%, face value of $1,000, and yield-to-maturity of 3.5%. hint: See solution for similar problem in lecture presentation on Bonds. Should the calculated value be greater than or less than $1,000?
- Calculate the value of a fixed rate bond with fifteen years left to maturity, annual coupon payments at a coupon rate of 3.5%, face value of $1,000, and yield-to-maturity of 5%. hint: See solution for similar problem in lecture presentation on Bonds. Should the calculated value be greater than or less than $1,000?
- Calculate the value of a fixed rate bond with fifteen years left to maturity, semi-annual coupon payments at a coupon rate of 5.0%, face value of $1,000, and yield-to-maturity of 3.5%. hint: See solution for similar problem in lecture presentation on Bonds. Should the calculated value be greater than or less than $1,000?
- 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.