You are required to set up a separate worksheet (spreadsheet
model) for each of the following four problems:

1) Calculate the yield to maturity of a 7-year $1,000 par
value bond with an annual coupon rate of 5.25% and a current price
of $1,200. Provide the solutions for both annual and semi-annual
payments of interest. Comment on the relationship between the yield
to maturity and the timing of interest payments, providing an
appropriate table or graph.

(20%)

2) Obtain from Bloomberg (or Datastream, or Thomson ONE
Banker, or Yahoo!Finance) the beginning of month values for the
period 2001-2015 of both the Dow Jones Utility Average Index and
the PHLX Gold/Silver Sector Index. Assume that you are a
risk-averse investor.

For each of the two assets represented by the indices,
calculate annual returns and build a frequency distribution of
annual returns. Provide graphs of the distributions.

Explore the risk-return relationship for the two assets. Plot
your results on a graph with the standard deviation of annual
returns of each asset on the horizontal axis and the average annual
return on the vertical axis, and comment on which asset performed
better.

Assume that you form a portfolio by investing equal amount of
money in each asset. Determine the average and standard deviation
of the portfolioâ€™s annual returns. Provide your interpretation of
the risk and return of the equally-weighted portfolio compared to
those of the individual assets.

Calculate and graph the average annual returns and standard
deviations of all portfolios that are combinations of Dow Jones
Utility Average and PHLX Gold/Silver Sector with the proportion of
the Dow Jones Utility Average being 0, 10, 20, 30, 40, 50, 60, 70,
80, 90, 100%. Comm

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