HP 17bII - Bonds; Example: Yield to Maturity and Yield to Call.

14: Additional Examples 215
File name : English-M02-1-040308(Print).doc Print data : 2004/3/9
Reference: Joseph M. Belth,
Life Insurance—A Consumer’s Handbook,
Indiana University Press, 1973, p. 234.
Bonds
Example: Yield to Maturity and Yield to Call. On March 16, 2003
you consider the purchase of a $1,000 bond that was issued on
January 1, 2001. It has a 10.5% semiannual coupon using a 30/360
calendar, and matures on January 1, 2031. The bond is callable on
January 1, 2006 at 110 (that is, $1,100). The bond is now selling at
115.174 (that is, $1,151.74). Determine both the yield to maturity and
the yield to call for this bond.
First, calculate the yield to maturity:
Keys: Display: Description:
   Displays BOND menu.
 

e

 
Sets semiannual bond
on 30/360 calendar.
@c
  Clears variables; sets
CALL to 100.
3.162003 
 
Stores today as
purchase date.
1.012031   Stores maturity date.
10.5   Stores coupon rate.

115.174 


Stores price. Displays
only two decimal
places, but stores all
three.
   Calculates yield to
maturity.