Question

Complete the steps below using cell references to given data or previous calculations. In some cases, a simple cell reference is all you need. To copy/paste a formula across a row or down a column, an absolute cell reference or a mixed cell reference may be preferred. If a specific Excel function is to be used, the directions will specify the use of that function. Do not type in numerical data into a cell or function. Instead, make a reference to the cell in which the data is found. Make your computations only in the blue cells highlighted below. In all cases, unless otherwise directed, use the earliest appearance of the data in your formulas, usually the Given Data section.

The table below summarizes prices (per $100 face value) of various default-free zero-coupon bonds (expressed as a percentage of face value):

a. Compute the yield to maturity for each bond.

b. Plot the zero-coupon yield curve (for the first five years).

c.Is the yield curve upward sloping, downward sloping, or flat?

Maturity (years)                Price                                 Face Value =$100.00

1	$95.51
2	$91.05
3	$86.38
4	$81.65
5	$76.51

a. Compute the yield to maturity for each bond.

YTM 1-year bond
YTM 2-year bond
YTM 3-year bond
YTM 4-year bond
YTM 5-year bond

b. Plot the zero-coupon yield curve (for the first five years).

c.Is the yield curve upward sloping, downward sloping, or flat?

The yield curve is _________

Answer 1