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You
have just found
the
price of
the bond
and
have
stored
it tem-
porarily.
Now,
determine
the present value
of the
call premium:
(j)
Key in 7
(yrs.)
,
press
SAVE
•
•
o
Key in
2
(coupons/yr.),
press
x
II.
G)
Key
in 2.4
(yield)
,
press
SAVE •
•
8)
Key
in
2
(coupons/y
r
.),
press
+
• .
®
Key in
4
(call premium),
press
II·
®
Press
II
to obtain present value of
the premium,
(3.38).
(])
Press
RCL
+
to
add bond
price
and
to
obtain
desired callable
price,
(108.83).
®
Press
.
0
to show
results rounded
to
six
decim al
places,
(108.831895).
To summarize:
BOND
7
SAVE.
365
x
112.4.3.25111
STO
7
SAVE.
2
x
11-_
_
bond
price
112.4
SAVE.
2
+
.41111-
•
•
••
presen
t val ue
of premium
RCL
+ ------------------------------------••
• .......
11.
call
able
bond
price
(percerltage)
.
01--------------·-. . . .
price
extended
Yield-to-Call Calculations
to 6 decimal
places
Effective
annual yield-to-call
calculations are
made
in
the same manner
as
yield-to-maturity
calculations
except that
the
annual coupon rate and
the price must
be
divided
by
the
ratio
of
the
call
price-to-par
before
being loaded
into
their appropriate
locations.
To
accomplish
this,
it is
first
necessary to
store
the
current
bond price
into
constant
storage.
62
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