Coupon payment the periodic payment made to the owner

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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 value. 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 displayed. 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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