Requirements : Using Word or Excel. You need to clearly show or explain all necessary formulas and steps taken in reaching to your solution.

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Requirements : Using Word or Excel. You need to clearly show or explain all necessary formulas and steps taken in reaching to your solution.
Answered Same DayOct 14, 2021

Answer To: Requirements : Using Word or Excel. You need to clearly show or explain all necessary formulas and...

Shakeel answered on Oct 17 2021
145 Votes
Sheet1
                        No of semi annual period    Cash flow    PV of cash flow @ 2.50%    Weight = PV of cash flow /
Price    Duration = No of period* Weight    Convexity = Sum of [t*(t+1)*weight*1/(1+y)^2]
        Face value    $1,000            1    $30    $29.27    0.0278    0.0278    0.0530
        Yield to Maturity    5%            2    $30    $28.55    0.0272    0.0543    0.1551
        Coupon rate    6%            3    $30    $27.86    0.0265    0.0795    0.3027
        Frequency    2            4    $30    $27.18    0.0259    0.1034    0.4921
        Maturity (yrs)    6            5    $30    $26.52    0.0252    0.1261    0.7202
                Formula used        6    $30    $25.87    0.0246    0.1476    0.9837
        Half yearly...
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