Question: Find the YTM of this coupon bond.
coupon = 5%
maturity = 3 years
interest rates: r1 = 3%; r2 = 4%; r3 = 4.5%
face value: 100%
Price of coupon is: P0 = 101,49 %
Solution: YTM= 4,459%
I guess using the Excel Solver function could be useful?
any help much appreciated!
On the BAII:
P/Y=C/Y=1
2nd FV (to clear out the TVM worksheet)
3 N -101.49 PV 5 PMT 100 FV CPT I/Y 4.458402
P.S.: You canโt bring a laptop into the exam with you, but they do let you bring in an approved calculator!!!
If you want to do it in Excel, use the RATE function; itโs easier than using Solver.
Thank you both very much for your fast help! , everything clear now!