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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This note was uploaded on 06/11/2011 for the course BUSI 408 taught by Professor Croce during the Spring '08 term at UNC.

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

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