Notes about the bond worksheet sets rv to 100 and cpn

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Unformatted text preview: t–not the dollar amount of the coupon payment. Chapter 4: Using the Bond Worksheet 37 Enter a date for RDT (redemption date) in the date format you selected (U.S. or European). The calculator assumes that the redemption date (RDT) coincides with a coupon date. For “to maturity” calculations, enter the maturity date for RDT. For “to call” calculations, enter the call date for RDT. The redemption value (RV) is a percentage of the bond’s par value. For “to maturity” analysis, enter 100 for RV. For “to call” analysis, enter the call price for RV. When either ACT or 360 is displayed, you can set the day-count method by pressing repeatedly to select either ACT (actual/actual) or 360 (30/360). When either 1/Y or 2/Y is displayed, you can set the coupon frequency by pressing repeatedly to select either 2/Y (two coupon payments per year) or 1/Y (one coupon payment per year). To compute a value for YLD, enter a value for PRI. To compute a value for PRI, enter a value for YLD. A value for AI is computed automatically in terms of dollars per $100 of par value. Terminology The following terminology applies to the Bond worksheet. Call Date – A bond that can be retired by the issuing agency before the bond’s maturity date is a callable bond. The call date for such a bond is printed in the bond contract. Coupon Payment – The periodic payment made to the owner of the bond as interest. Coupon Rate – The annual interest rate printed on the bond. Dollar Price – Price of the security expressed in terms of dollars per $100 of par value. Par Value (or face value) – The value printed on the bond. Premium/Discount – A bond that sells for an amount greater than the par value sells at a premium. A bond selling for less than the par value sells at a discount. 38 Chapter 4: Using the Bond Worksheet Redemption Date – The date on which the issuing agency retires the bond. This date may be the date of maturity or, for a callable bond, a call date. Redemption Value – The amount p...
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