Suppose the Dutch government issued a bond with 20 years until maturity, a face value of €1000 and a coupon rate of 10% paid annually

We can calculate the desired result as follows:

Face Value (fv) = €1000

Coupon rate = 10%

Coupon Payment (pmt) = 10% * 1,000

= €100

Period (nper) = 20 years

YTM (rate) = 5%

Using the PV function, we can calculate the present value of coupon payments as:

= PV(rate, nper, -pmt)

= PV(5%,20,-100)

= €1,246.22

B) Present value of the bond is calculated as follows:

Face Value (fv) = €1000

Coupon Payment (pmt) = 10% * 1,000

= €100

Period (nper) = 20 years

YTM (rate) = 5%

Using the PV function, we can calculate the present value of bond as:

= PV(rate, nper, -pmt, -fv)

= PV(5%,20,-100,-1000)

= €1,623.11

C) Price of the bond immediately before it makes the first coupon payment is :

= Annual Coupon Payment + PV of Bond after 1 year

PV of Bond after 1 year = PV(rate, nper, -pmt, -fv)

= PV(5%,19,-100,-1000)

= €1,604.24

Annual Coupon payment = $ 100

Price of the bond = 100 + 1,604.24

= €1,704.24

D) Price of the bond immediately after it makes the first coupon payment is :

= PV of Bond after 1 year

= PV(rate, nper, -pmt, -fv)

= PV(5%,19,-100,-1000)

= €1,604.24