MyFinanceLab Ch. 9

MyFinanceLab Ch. 9 - Fisher model: o Rnominal = (1 +...

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MyFinanceLab: Ch. 9 Loan interest rate (yield rates): o Previous period LIBOR + basis points o Also factor in floor and ceiling Bond value in Excel: o =PV (YTM, nper, [coupon rate x par value], FV) o Divide coupon rate by 2 if semiannual o FV is par value o Par value changes based on monthly, etc. o For semiannual stuff: YTM should still be annual Multiply RATE answer by 2 If coupon rate < YTM: o Bond sells at a discount o You want to purchase bonds cheap, with a high yield
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Unformatted text preview: Fisher model: o Rnominal = (1 + Rinflation) x (1 + Rreal) 1 Yield questions: o =RATE (nper, pmt based on $1000 par value, PV -$1250 price, FV $1000 par) How to set up GoalSeek in Excel: o Set up uneven flow chart in Excel o Enter in all cash flows (including payback at end) o In PV of CFs column for each row do: CF/ (1 + $x$%)^period Leave out per. 0 Do GoalSeek for $x$% cell...
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MyFinanceLab Ch. 9 - Fisher model: o Rnominal = (1 +...

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