Bond Calculation Example

What price should you pay on April 28, 2010 for a 6.75% U.S. Treasury bond maturing on June 4, 2020, if you want a yield of 4.75%? Assume the bond is calculated on a semiannual coupon payment on an actual/actual basis. See Table 6-2.The example below is calculated with RPN as the active operating mode.

Table 6-2 Bond Calculation Example

KeyDisplayDescription

B

Opens the Bond menu.

 

>

I

Scrolls to bond coupon (payment) frequency.

Selects semiannual coupon payment, as required by the example.

<4.2

82010 I

Inputs April 28, 2010 for the settlement date (mm.ddyyyy format).

<6.0

42020 I

Inputs June 4, 2020 for the maturity date.

<6.7

5I

Inputs 6.75% for the value for CPN%.

<

 

Displays current call value. Default is

 

 

100. Note: if Call requires another

 

 

value, key in the number followed by

 

 

I.

 

 

 

 

 

<4.7

 

Inputs 4.75% for Yield%.

5I

 

 

 

 

 

 

 

 

<=

Calculates the current value for Price.

Bonds 49

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HP 30b Professional, 20b Consultant Financial manual 82010, 42020, Bond Calculation Example
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30b Professional, 20b Consultant Financial specifications

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