finance problem

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Please solve this problem using excel. there is an excel file attached for the hints to solve the problem

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financeproblem.docx

HW – Chapter 5 – Problems 15, 19, 20

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hints.xlsx

Hints-Blank

Hints for Chapter 5 - Problems 15, 19, 20
5-15 r* 2.00%
Year one-year inf IP
2019 1.50%
2020 1.70%
2021 0.90%
(a) one-year rRF = r* + IP(1)
(b) two year rRF = r* + IP(2)
(c) three-year rRF = r* + IP(3)
5-19 rRF 2.00%
maturity
Bond(T) 4.20% 5
Bond(Q) 4.95% 8
(a) annual MRP
(b) r = 4.2% = rRF + MRP + DRP = 2% + 0.25% x 4 + DRP DRP =
Or, r = 4.95% = rRF + MRP + DRP = 2% + 0.25% x 7 + DRP DRP =
5-20 rRF 2.60%
r 4.80%
LP 0.30%
MRP/yr 0.20%
r(1-year) = 4.8% = rRF + MRP + LP + DRP = 2.6% + 0.2% x 0 + 0.3% + DRP => DRP=
r(5-years) = rRF + MRP + LP + DRP = 2.6% + 0.2% x 4 + 0.3% + DRP =

1.5% 1.7% 2.0%

2%

4.2%

4.95%.

2.6%

0.2%

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Sheet3

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