XLS Bond Valuation and Duration - Directory Viewer

 The value of a bond is equal to the present value of its cash flows, using the market interest rateas the discount rate.=" "&AI7&" - "&AK7 The duration of a bond is a measure of the bond's price volatility. The higher the duration,=" $ "&FIXED(D9*D12,0,TRUE)&" +"=" "&FIXED(D10,0,TRUE)&" years"the more volatile the price. Approximate Implied Yield =DATA FOR THE PROBLEM: BOND VALUE:=AK7&" + "&AI7Coupon Rate on Bonds0.05=D9/D11*D12x=ROUND((1-(1/(1+D13/D11)^(D10*D11)))/(D13/D11),3) ==E9*G9 2Years to Maturity2=D12x=ROUND(1/(1+D13/D11)^(D10*D11),3) ==E10*G10No. of Payments/Yr.12 Fair Price of Bond ==I9+I10Face Value1000Current Market Rate0.03 (Rounding of present value factors may cause a Approximate=" $ "&FIXED(D9*D12,2,TRUE)&" + $ "&FIXED((D12-D14)/D10,2,TRUE)Current Price of Bond1000 slight error.) Implied Yield ==(D14+D12)/2Bond Value ==I11Duration ==IF(E66=0,0,(G66/E66)/D11)YearsImplied Yield to Maturity ==L18True YTM ==L28 Approximate Implied Yield ==((D9*D12)+(D12-D14)/D10)/L14TRUE YIELD TO MATURITYPV of PresentCash FlowsThe true yield-to-maturity is the interest rate which equates the bond's current selling price with theCash Value PV of * Year No.present value of the cash flows (i.e., the interest payments and the face value). The implied yieldPeriodFlows FactorsCash Flows(for Duration)to maturity approximates this true yield-to-maturity.0=-D14=ROUND(IF(A25 ................
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