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QUESTION

A C D F Time until :` PVOFOF : Column ( C ) 2 Payment : ( Discount rate =` : Period ( Years ) Cash flow: 5% per period!* Weight : Column ( F)...

Assume you will be paying $10,000 a year in tuition expenses at the end of the next

2 years (i.e. $10,000 at end of the year 1, $10,000 at end of the year 2). Market rate

is 8%. Modify the spreadsheet 3.1 of "Duration Spreadsheet" to calculate the

duration of your obligation? Hint: you can treat this obligation as a bond.

'use the provided spread sheets to show your work.

  • Attachment 1
  • Attachment 2
ACDFTime until :`PVOFOF: Column ( C )2Payment: ( Discount rate =`: Period( Years )Cash flow: 5% per period!*Weight": Column ( F){`\A. BYA Coupon bond0.540 :38.095:`0.03.95:`LELO'DCAT\1. 036. 281:10.03TO:`1.5$34.5.54:0.01358 :0. 05.372.01040:8:55.61 1:1.77418Sum :`404. 540:1. 8$521013\1 41516\Semiannual int rate* :"1718 | Weight = Present value of each payment ( Column E ) divided by the bond pricePage 1
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