Problems

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Skill-Building Problems.

1. Given the yield curve as published by the financial press, consider a coupon bond has a face

value of $2,000 , an annual coupon rate of 4.2% , makes 2 (semiannual) coupon payments per

year, and 8 periods to maturity (or 4 years to maturity). Determine the price and yield to

maturity of this coupon bond based on the Annual Percentage Rate (APR) convention. Then use it

to determine the price and yield to maturity of this coupon bond based on the Effective Annual

Rate (EAR) convention.

2. Given the yield curve as published by the financial press, calculate the implied forward rates at all

maturities.

Live In-class Problems.

3. Given the partial Obtaining It From Bond Listings spreadsheet YieldliZ.xls, do step 2 Time To

Maturity.

4. Given the partial Using It To Price A Coupon Bond spreadsheet YieldcoZ.xls, complete step 4

Calculate the Price and Yield To Maturity of a Coupon Bond using the Cash Flows.

5. Given the partial Using It To Determine Forward Rates spreadsheet YieldfoZ.xls, do step 3

Forward Rates.

Skill-Building Problems.

1. Given the yield curve as published by the financial press, consider a coupon bond has a face

value of $2,000 , an annual coupon rate of 4.2% , makes 2 (semiannual) coupon payments per

year, and 8 periods to maturity (or 4 years to maturity). Determine the price and yield to

maturity of this coupon bond based on the Annual Percentage Rate (APR) convention. Then use it

to determine the price and yield to maturity of this coupon bond based on the Effective Annual

Rate (EAR) convention.

2. Given the yield curve as published by the financial press, calculate the implied forward rates at all

maturities.

Live In-class Problems.

3. Given the partial Obtaining It From Bond Listings spreadsheet YieldliZ.xls, do step 2 Time To

Maturity.

4. Given the partial Using It To Price A Coupon Bond spreadsheet YieldcoZ.xls, complete step 4

Calculate the Price and Yield To Maturity of a Coupon Bond using the Cash Flows.

5. Given the partial Using It To Determine Forward Rates spreadsheet YieldfoZ.xls, do step 3

Forward Rates.