Create simple models for finding the ytm of bond

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Reference no: EM132012031

Create simple models for finding the YTM of a bond, then perform several sensitivity analyses.

The bond has exactly 6.5 years to maturity, $ 1000 face value, 10% coupon rate, pays a quarterly coupon, and trades at $1100. What is the YTM of this bond? You need to provide three calculations of YTM using these three functions: RATE, IRR, and YIELD. All three results have to be the same. Display YTM with three decimals! Afterwards, do a sensitivity analysis. Make one data table that shows how the YTM changes when the bond price changes. Then make one more data table that shows different YTMs for different coupon frequencies. Consider the following frequencies: annual, semi-annual, quarterly, and monthly. Graph the results obtained from the data tables in two separate graphs. The graphs need to have labeled axes and a title. Comment on the trends. What trends do you see? How does YTM change when prices change? Why? How does YTM change when coupon frequency changes? Why?

Reference no: EM132012031

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