finance problem
yagnipatel99Please solve this problem using excel. there is an excel file attached for the hints to solve the problem
2 years ago
20
files (2)financeproblem.docx
hints.xlsx
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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financeproblem.docx
HW – Chapter 5 – Problems 15, 19, 20
