Question -
1. Calculate portfolio yield composed of the entire bond in Texas utilities, Transamerica, United airline, and Litton Industry. Assume the four bonds respectively have maturity of 4, 5, 6 and 7 years. To calculate portfolio yield you need to estimate price of each bond assuming respective yield, coupon in the exhibit with the maturity that is given. Use the total market value as an input in excel. Use the cash-flows from the entire bond portfolio for 7 period as your input into IRR.
2. Calculate the terminal value of the above portfolio assuming the proceeds from the portfolio is invested at 3, 4 and 4.5 percent.
Attachment:- Table.rar