In a spreadsheet, create three separate sheets, labelled ‘Part a’, ‘Part b’, and ‘Part c’

In a spreadsheet, create three separate sheets, labelled ‘Part a’, ‘Part b’, and ‘Part c’. Then answer the following questions.

1. On your sheet labelled ‘Part a’ do the following. Firstly, you are required to price a number of bonds (30 in all). We start by considering a 2% Treasury bond, maturing in 7 years. Price this bond at yields to maturity of

• 47 basis points under CY₂₀.
• 153 basis points over CY₂₀.
• 353 basis points over CY₂₀.
• 1753 basis points over CY₂₀.

Where CY₂₀ is the Australian 10-year government bond yield for calendar year 2020 (i.e., the 10-year government bond yield on 31 December 2020).”

Next, consider a 10% Treasury bond, maturing in 7 years. Also price this bond at yields to maturity of

• 47 basis points under CY₂₀.
• 153 basis points over CY₂₀.
• 353 basis points over CY₂₀.
• 1753 basis points over CY₂₀.

Finally, consider a 20% Treasury bond, maturing in 7 years. Also price this bond at yields to maturity of

• 47 basis points under CY₂₀.
• 153 basis points over CY₂₀.
• 353 basis points over CY₂₀.
• 1753 basis points over CY₂₀.

“You will need to use FactSet to find this value.