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Please analyze the data in the Spreadsheet 10.1 in Financial Analysis 12e , Chapter 10 p.295 and change the relevant selected input variables of bond characteristics including annual coupon rate but realistically, and following the market conventions for quoting bonds for each bond separately to get the invoice price of 118, 110 and 100 respectively for the first, the second and the third bond in the table.

Please use the trial and error method to solve the problem in the spreadsheet. Please discuss how your changes will affect the annual cash flow expected for an investor holding the bond. You can use the provided spreadsheet 10.2 on page 298 for some additional help for you to practice some changes and see the implications for YTM.

Next\, how can you increase the value (Invoice price of these bonds) additionally, beyond this exercise, by adding extra information, features and covenants to these plain vanilla bonds? Please refer to the securities valuation concepts and the peer-reviewed journals papers to support your ideas to address this very important issue for an issuer of exotic bonds

10.1

Time inflation Ended Pay Year Coupon pymt principal total payment

0		1000.00
1	2%	1020.00	10.80	0	\40.820
2	3	050.60	42.02	0	42.02
3	1	1061.11	42.44	1061.11	1103.55

10.2

Time to Maturity	2%	4%	6%	8%	10%
1 year	1059.11	1038.83	1019.13	1000.00	981.41
10 years	1541.37	1327.03	1148.77	1000.00	875.8`
20 years`	1985.04	1547.11	1231.15	1000.00	828.41
30 years	2348.65	1695.22	1276.76	1000.00	810.71

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