HP 12C Financial 12C 4.75¼, 6.75P, 4.282004, Bond Price, 5.Press fE, Page: 82 of, Enters coupon rate, Printed Date: 2005/8/1, Enters yield to maturity, Dimension: 14.8 cm x 21 cm

82 Section 4: Additional Financial Functions

Bond Calculations

The hp 12c platinum enables you to solve for bond price (and the interest accrued since the last interest date) and the yield to maturity.* The fE and fS calculations are done assuming a semiannual coupon payment and using an actual/actual basis (such as for U.S. Treasury bonds and U.S. Treasury notes). In accordance with market convention, prices are based on a redemption (par) value of 100.

To calculate bond price and yield for a 30/360 bond (that is, using the basis of a 30-day month and a 360-day year —such as for municipal bonds, corporate bonds, and to calculate bond price for bonds with an annual coupon payment), refer to Section 16: Bonds.

Bond Price1.Enter the desired yield to maturity (as a percentage), using ¼.2.Enter the annual coupon rate (as a percentage), using P.3.Key in the settlement (purchase) date (as described on page 37), then press

\.

4.Key in the maturity (redemption) date.5.Press fE.

The price is shown in the display and also is stored in the PV register. The interest accrued since the last interest date is held inside the calculator: to display the interest, press ~; to add the interest to the price, press +in RPN mode and +~}in ALG mode.

Example: What price should you pay on April 28, 2004 for a 6.75% U.S. Treasury bond that matures on June 4, 2018, if you want a yield of 4.75%. Assume that you normally express dates in the month-day-year format.

Keystrokes	Display
(RPN mode)
4.75¼	4.75	Enters yield to maturity.
6.75P	6.75	Enters coupon rate.
gÕ	6.75	Sets date format to month-day-year.
4.282004\	4.28	Enters settlement (purchase) date.
6.042018	6.042018	Enters maturity (redemption) date.
fE	120.38	Bond price (as a percent of par).
+	123.07	Total price, including accrued interest.

*All bond calculations are performed in accordance with. the Securities Industry Association’s recommendations as contained in Jan Mayle, TIPS Inc., Standard Securities Calculation Methods, Volume 1, Third Edition, Securities Industry Association Inc., New York, 1993.

File name: hp 12c pt_user's guide_English_HDPMF123E27	Page: 82 of 275
Printed Date: 2005/8/1	Dimension: 14.8 cm x 21 cm