Bonds - HP 17bll+ User Manual

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:
 
 

e
@c

3.162003

1.012031
10.5 

115.174 
 
Display:


 
 

 
  Stores maturity date.




Description:
Displays BOND menu.
Sets semiannual bond
on 30/360 calendar.
Clears variables; sets
CALL to 100.
Stores today as
purchase date.
Stores coupon rate.
Stores price. Displays
only two decimal
places, but stores all
three.
Calculates yield to
maturity.
14: Additional Examples 215