Use your calculator's PV, PMT, FV N, and I functions to solve for PV. Or discount all future cash flows back to present value to get the price of the bond.
posted: Feb. 25, 2013 @ 11:39a
Yeah, my professor said we can seek outside help if need be. He just said we are supposed to make an attempt first, and I have been trying. I have been using the excel functions (PV, PMT, FV, etc.) but none of them seem to be giving me the answer or are asking me for inputs that I do not have.
I did get to $5,044.56, but I am not certain if that is correct or not.
Senior Member - 5K
posted: Feb. 25, 2013 @ 11:45a
Answer is >$5000
Senior Member - 3K
posted: Feb. 25, 2013 @ 11:54a
Excel is your friend, use =PV(0.043/2,5*2,(5000*0.045)/2,5000)
First field is discount rate (divide by 2 for semiannual), second is number of payments (5 years * 2 for semiannual), Coupon payment is field 3 (bond price * coupon rate / 2 for semi annual, last field is face value
Result is $5044.56, which makes sense because the discount rate is slightly below the coupon yield. Yields fell slightly so the bond price rose slightly.
posted: Feb. 25, 2013 @ 12:38p
This is a university course assignment. You should read your textbook. There are solved examples showing you how to work these problems.
posted: Feb. 25, 2013 @ 1:06p
I understand you can ask for help wherever, but FWF isn't a place that's best suited for it. If you can't find it in a textbook, google is your friend.
posted: Feb. 25, 2013 @ 2:54p
Is it "ask a homework question" day today?
posted: Feb. 25, 2013 @ 4:02p
why not email your professor asking for a hint? that is what I do when I get stuck and normally they are glad to help
Senior Member - 4K
posted: Feb. 26, 2013 @ 10:01a
I keep clicking on this post thinking it has something to do with Sean Connery or Daniel Craig or Skyfall!
posted: Feb. 26, 2013 @ 10:28a
Yeah, this really isn't the place to ask this. Aren't there some classmates that could help? College age, female, good loo---uh, I mean, uh, what were you asking again?
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