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Unformatted text preview: aid to the owner of the bond when it is
retired. If the bond is redeemed at the maturity date, the redemption value
is the par value printed on the bond. If the bond is redeemed at a call date,
the redemption value is the bond’s par value plus any call premium. The
calculator treats the redemption value in terms of dollars per $100 of par
Yield to Maturity – The rate of return to the investor earned from
payments of principal and interest, with interest compounded semiannually
at the stated yield rate. The yield to maturity takes into account the amount
of premium or discount, if any, and the time value of the investment. Entering Data and Computing Results
Before computing values for price or yield and accrued interest, enter the
four known values (settlement date, coupon rate, redemption date, and
redemption value). If necessary, change the day-count method and coupon
frequency settings. The worksheet stores values and settings until you clear
the worksheet or change the values and settings. Entering the Data
First enter the known values:
1. Press l. SDT is displayed, along with the previous date. 2. Press to clear the worksheet. 3. Key in a value for SDT (settlement date) and press . 4. Press repeatedly and enter values for CPN (coupon rate), RDT
(redemption date), and RV (redemption value) just as you did for SDT. Chapter 4: Using the Bond Worksheet 39 Selecting the Settings
After entering the known values, select the settings:
1. Press until ACT or 360 is displayed to select the day-count method. To select the actual/actual day-count method, press
repeatedly until ACT is displayed.
To select the 30/360 day-count method, press
until 360 is displayed.
2. Press repeatedly until 2/Y or 1/Y is displayed to select coupon frequency. To select two coupons per year, press
To select one coupon per year, press
displayed. repeatedly until 2/Y is
repeatedly until 1/Y is Calculating Price (PRI)
1. Press until YLD is displayed. 2. Key in a value for YLD and press
3. Press ....
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This homework help was uploaded on 04/03/2014 for the course ECON 203 taught by Professor Petry during the Summer '09 term at University of Illinois, Urbana Champaign.
- Summer '09