Advanced Problems for Spreadsheet Application

These problems are available in MyFinanceLab.

  1. Bond ladder . Mathew and Anna are setting up a retirement payout account for the next twenty years. They have decided to buy government bonds that have various coupon rates. The following table gives the yield to maturity and the coupon rate on each bond for each maturity date.

    Maturity YTM Coupon Maturity YTM Coupon
    1 3.2500% 5.50% 11 4.8750% 5.25%
    2 3.5000% 6.25% 12 5.0000% 4.75%
    3 3.7500% 4.75% 13 5.0625% 4.00%
    4 4.0000% 7.00% 14 5.1250% 4.50%
    5 4.1250% 6.50% 15 5.1875% 5.25%
    6 4.2500% 8.25% 16 5.2500% 6.00%
    7 4.3750% 8.00% 17 5.3125% ...

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