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Comide u 30-cut laced with wimul 10% coupantate id $110 pur value Assume the back was oue: CSI2 Year end Price Rand 0 1 Rondom YTM between 0.05 to 0.15 0,10 0,13 0,00 2 3 4 0,12 5 0,14 6 0,00 0,03 0,05 0,12 0.00 9 10 11 0,12 12 OS 13 14 15 YTM- 0005 0,1 0.15 Secremect Date Pr.CYTM Price TY-0.03 PticeTM-01 Price: YTM2015 () - 1/1/00 1/1/01 1/1/02 1/1/03 1/1/04 1/1/05 1/1/06 1/1/07 1/1/08 1/1/09 1/1/10 1/1/11 1/1/12 1/1/13 1/1/14 1/1/IS 1/1/16 1/1/12 1/1/18 1/1/19 1/1/20 1/1/21 1/1/22 1/1/23 1/1/24 1/1/25 1/1/26 1/1/27 1/1/28 1/1/29 1/1/00 1/1/01 1/1/02 1/1/03 1/1/14 1/1/05 1/1/s 1/1/07 1/1/0B 1/./09 1/1/10 1/1/11 1/1/12 1/1/13 1/1/14 1/1/15 1/1/15 1/1/17 1/./18 1/./19 1/5/20 1/1/21 1/1/22 1/1/23 1/1/24 1/1/25 1/1/25 1/1/27 1/1/25 1/1/29 16 17 0,10 0,13 0,0K 0,00 0,11 0,05 0,05 0,13 16 19 20 21 22 0,05 23 0,05 24 0,25 25 0,10 0,12 26 27 28 0,05 29 0,05 After you have done the above plot, consider the more practical case: the future interest rate is hard to predict and may fluctuate between 0.05 and 0.15. Case 4: YTM is randomly distributed around 0.1020.05. Now calculate the bond prices for the time-varying YTM by filling out the pink area to the right of the figure. When the market interest rate fluctuates over time, the bond price should also fluctuate over time. What is your holding period return from 2019/1/1 to 2020/1/1? Don't forget adding up the annual coupon when calculating HPR. Comide u 30-cut laced with wimul 10% coupantate id $110 pur value Assume the back was oue: CSI2 Year end Price Rand 0 1 Rondom YTM between 0.05 to 0.15 0,10 0,13 0,00 2 3 4 0,12 5 0,14 6 0,00 0,03 0,05 0,12 0.00 9 10 11 0,12 12 OS 13 14 15 YTM- 0005 0,1 0.15 Secremect Date Pr.CYTM Price TY-0.03 PticeTM-01 Price: YTM2015 () - 1/1/00 1/1/01 1/1/02 1/1/03 1/1/04 1/1/05 1/1/06 1/1/07 1/1/08 1/1/09 1/1/10 1/1/11 1/1/12 1/1/13 1/1/14 1/1/IS 1/1/16 1/1/12 1/1/18 1/1/19 1/1/20 1/1/21 1/1/22 1/1/23 1/1/24 1/1/25 1/1/26 1/1/27 1/1/28 1/1/29 1/1/00 1/1/01 1/1/02 1/1/03 1/1/14 1/1/05 1/1/s 1/1/07 1/1/0B 1/./09 1/1/10 1/1/11 1/1/12 1/1/13 1/1/14 1/1/15 1/1/15 1/1/17 1/./18 1/./19 1/5/20 1/1/21 1/1/22 1/1/23 1/1/24 1/1/25 1/1/25 1/1/27 1/1/25 1/1/29 16 17 0,10 0,13 0,0K 0,00 0,11 0,05 0,05 0,13 16 19 20 21 22 0,05 23 0,05 24 0,25 25 0,10 0,12 26 27 28 0,05 29 0,05 After you have done the above plot, consider the more practical case: the future interest rate is hard to predict and may fluctuate between 0.05 and 0.15. Case 4: YTM is randomly distributed around 0.1020.05. Now calculate the bond prices for the time-varying YTM by filling out the pink area to the right of the figure. When the market interest rate fluctuates over time, the bond price should also fluctuate over time. What is your holding period return from 2019/1/1 to 2020/1/1? Don't forget adding up the annual coupon when calculating HPR

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