Type the Excel function for the price of a 3-year, 3 % annual-coupon, $1,000-par bond when the market yield is 4 %, as a positive number.
Type the Excel function for the price of a 3-year, 3 % annual-coupon, $1,000-par bond when the market yield is 4 %, as a positive number.
Answer
=-PV(0.04,3,30,1000)
rate 4 %, nper 3, pmt 30 (the unchanged coupon), fv 1,000 → 972.25. At 3 % it is 1,000.00: rates up, price down.
Bank of Canada, "Understanding how monetary policy works" (bankofcanada.ca, 2021) — adapted with attribution and changes; Bank of Canada content is available free of charge at bankofcanada.ca; Bigel, Introduction to Financial Analysis (CC BY 4.0) §10.14 — rate-to-price shape only; original bond and scenario