Use the table below for the prevailing six-month forward rates (Annualized rates/BEY). Calculate
the value of a 4.25% 5-year Treasury issue.
Period Years Forward Rate (Annual %)
1 0.5 3.00
2 1.0 3.60
3 1.5 3.92
4 2.0 5.15
5 2.5 6.54
6 3.0 6.33
7 3.5 6.23
8 4.0 5.79
9 4.5 6.01
10 5.0 6.24
11 5.5 6.48
12 6.0 6.72
13 6.5 6.97
14 7.0 6.36
15 7.5 6.49
Can someone solve this in excel? Please show the variables. Thanks!
| Period(n) | Cash Flow((Semi-Annual) | Forward Rate r | PV |
| 0.5 | 21.25 | 3.00% | 21.231 |
| 1 | 21.25 | 3.60% | 21.223 |
| 1.5 | 21.25 | 3.92% | 21.218 |
| 2 | 21.25 | 5.15% | 21.195 |
| 2.5 | 21.25 | 6.54% | 21.162 |
| 3 | 21.25 | 6.33% | 21.168 |
| 3.5 | 21.25 | 6.23% | 21.170 |
| 4 | 21.25 | 5.79% | 21.181 |
| 4.5 | 21.25 | 6.01% | 21.176 |
| 5 | 1021.25 | 6.24% | 1,017.400 |
| Total | 1,208.123 |
Note: PV= Cash Flow/(1+r)n
Use the table below for the prevailing six-month forward rates (Annualized rates/BEY). Calculate the value of...