Excel Project 2 - Instructions - v2007

Excel Project 2 - Instructions - v2007 - Excel Project 2...

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Excel Project 2 – Instructions EC370 – Fall 2008 1) First, download the Bond Valuation.xls from blackboard. Keep in mind when you do this assignment that ALL cells you enter in this assignment should be formulas with the exception of the guess for the yield to maturity (YTM). It’s always best practice to use formulas to reduce your work in the future, and it keeps your workbook as general as possible. The File contains information about two hypothetical bonds – A and B. Notice that each is a 5 year bond with a current yield of 10%. The purpose of this assignment is to increase familiarity with the bond pricing method learned in class, and to learn a few techniques in excel. 2) First, use the coupon rate and face value of the bonds to calculate the nominal (undiscounted) cash flows received each year. Remember that in the last year both the coupon and the face value are received. Use the ‘$’ in your formulas to make it easier on yourself. If you can’t figure this part out on your own, look in the formula bar in the two screenshots below.
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