## Description

__Assignment Part A requirements__

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You must provide a full answer with explanation and accompanied with the calculation done manually and in Excel. See the example below.

- Manual answer as if you were answering the question in an exam (but typed). Include a time line or cash flow map/table, an explanation of the logic used to arrive at the answer, the formula used and then the calculations. The formula on its own followed by the answer is not enough. Assignment Part A requirements.
- You must
do the solution in Excel. You can embed your excel file in your word document. See the excel file embedded below. Click on the excel icon to see the example in Excel. The calculation must be done in excel. Typing the answer as a number into excel is not enough. Assignment Part A requirements.__also__

You have three options:

- Do all the assignment with explanations in excel and upload one file. Type your explanation and manual answer in text boxes.
**This is the preferred method.** - Do the assignment in two files, one Word document and one Excel document. Then upload both documents.
- Do the assignment producing two files one word document and one excel document. Embed the excel file into the word document and upload one file. Assignment Part A requirements.

__Number one is the preferred option. __

__EXAMPLE OF HOW TO SET OUT YOUR ANSWERS__

__Question: 90 Day Bank Bill__

Polycorp is about to issue a 90 day bank bill with a face value of $100,000. If the published yield is 8% pa at what price can the bill be issued?

__Solution:__

Cash Flow Map

0 90

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PV FV = 100000

Yield is 8%pa, by convention this is annual nominal. The face value is 100,000 and will be paid in ninety days. The price is given by the present value using the Assignment Part A requirementsbank bill formula.

Price = PV = =

Where:

PV = present value = price (unknown)

FV = future value = face value = 100000 in this case

*i* = market rate for 90 days = we need to calculate this by converting the .08 to a daily rate (divide by 365) and then converting this to a 90 day rate (multiply by 90).

t = days to maturity

365 is the number of days in a year

PV = 100000/(1+.08*90/365) = __98065.56__

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__To embed your excel file into a word document. __

Finish and save your excel file. Make sure it is closed.

Open your word document and move to the end of the document or to the position in the word document where you would like to embed your excel file. Assignment Part A requirements.

Insert

Object

Click the create from file tab

Make sure to tick the “display as icon” box

Browse to find your excel file

Insert

OK