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US government issued a railroad perpetual bond that pays $100 every year forever. However the interest...

US government issued a railroad perpetual bond that pays $100 every year forever. However the interest rate fluctuates a lot, and you want to know the impact of interest rate on price of the bond. Consider interest rates range between 1% and 20% with 1% incremental step. Plot the relationship between interest rate and price of the perpetual bond in Excel, and clearly state the relationship.

Note: plot interest rate in X axis, and price in Y axis. Note that in Excel, you put interest rates in one column, and prices in another column, then select these two, and click insert graph. You might have to right click the graph to choose what is displayed on X axis.

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Dear Student,

Please see the picture for the answer, comment if u have any doubt and like if u are satisfied with the answer.

jeff jeffy answered 2 years ago
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