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Calculate the new price of the bond

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Reference no: EM133113666

  1. For a bond with information defined in the table below. Please perform the following calculations:
    1. Map out the cash flows as a function of years into the future in Excel, calculate the discount factor (using YTM) for each of the cash flow 
    2. Calculate the present value of each of the cash flows and the price of the bond based on PV of the all of the cash flows
    3. Calculate the price of the bond using a different way: the PRICE function in Excel and confirm you obtained the same price as in step b
    4. For the same bond in prob, assuming the new yield of the bond one year from today is 4%. Perform the following calculations:
      1. Calculate the new price of the bond, using the Price function in Excel. (Ignore the fact one year later this bond is only a four year bond)
      2. Calculate the price return of the bond and the income of the bond (using original YTM)
      3. Calculate the 1 year total return of the bond

settlement

11/19/2021

Maturity

11/19/2026

Yield to Maturity

Coupon

Principal

 

3.00%

3.50%

 $100 

 

 Compounding Freq

2.0

 

 

Reference no: EM133113666

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