Asked Mar 7, 2020

[EXCEL] Realized yield: Four years ago, Lisa Stills bought six-year, 5.5 percent coupon bonds issued by the Fairways Corp. for $947.68. If she sells these bonds at the current price of $894.52, what will be her realized yield on the bonds? Assume similar coupon-paying bonds make annual coupon payments. Please use Excel


Expert Answer

Step 1

The question is based on the concept to calculate yield till holding period from a bond investment, using following function in excel,

Finance homework question answer, step 1, image 1

Pv = Buying price of the bond = $ 947.68

nper = number of payment = 4 ( left for coupon payment)

Pmt = Periodic payment (5.5% annual) = 5%*$1000= $50

Fv= Selling price of the b...

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