Calculate the appropriate price and yield to maturity

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Use an Excel spreadsheet to calculate the appropriate price and yield to maturity for the three bonds listed below:

a. Bond with coupon rate of 10% and face value of $1000 that matures in 6 years.

b. Bond with coupon rate of 5% and face value of $1000 that matures in 4 years

c. Bond with coupon rate of 2% and face value of $1000 that matures in 2 years.

Assume that the one-year, two-year, three-year, four-year, five-year, and six-year spot rates are 4.00%, 4.50%, 4.75%, 5.00%, 5.20%, and 5.50%, respectively. All coupons are paid annually. Please print out a copy of the spreadsheet used to price bond (b) and attach it to your homework. You do not need to show your work for bonds (a) or (c).

Reference no: EM131997768

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