15-10-2

Bond Calculation

kExample 1

You want to purchase a semiannual (Compounding Frequency = Semi-annual) corporate bond that matures on 12/15/2006 (d2) to settle on 6/1/2004 (d1). The bond is based on the 30/360 day-count method (Days in Year = 360 days) with a coupon rate (CPN) of 3%. The bond will be redeemed at 100% of its par value (RDV). For 4% yield to maturity (YLD), calculate the bond’s price ([PRC]) and accrued interest (INT).

•Before performing the calculation, you should use the [Format] tab to change the [Bond Interval] setting to “Date” and the [Compounding Frequency] to “Semi-annual”.

•You can also look at the status bar to see if the settings are correct. If they are not, tap the settings in the status bar to switch to the correct ones.

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