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You are given the following information from a T-Note quote: Settlement date: September 15, 2017 Maturity...

You are given the following information from a T-Note quote:

Settlement date: September 15, 2017

Maturity date: September 15, 2032

Price Quote: 102:9

In excel, compute and graph the coupon rates and current yields for yields-to-maturity of 1% to 10%, in 1% increments. Which of the following accurately depicts this calculation?

Solutions

Expert Solution

It is assumed that the coupon frequency is annual

The annual coupon payment is calculated using PMT function in Excel :

rate = YTM

nper = 15 (there are 15 years left to maturity)

pv = -102.9 (current price of note)

fv = 100 (face value of note)

Coupon rate = coupon payment / 100

current yield = coupon payment / current price of note

jeff jeffy answered 3 months ago
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