HP 12C Financial calculator - Manual (Page 165)

Section 16: Bonds 165
File name: hp 12c_user's guide_English_HDPMBF12E44 Page: 165 of 209
Printered Date: 2005/7/29 Dimension: 14.8 cm x 21 cm
For a new case return to step 3. Note that only those values which have been
changed need to be reentered and stored.
8. If yield is desired:
a. Press 0?0.
b. Key in the price as a percentage of par value and press ?1.
c. Press t to compute annual yield to maturity.
For a new case return to step 3. Note that only those values which have
been changed need to be reentered and stored.
Example 1: What price should you pay on August 28, 2004 for a 5 1 /
2
% bond
(computed with a 30/360 basis) that matures on June 1, 2008, if you want a
yield of 7
3 /
4
%? What price should you pay for a yield of 8%? This problem
assumes a redemption value of 100.
Keystrokes Display
?Æ Set compound interest mode if the C
indicator is not on.
5.5?2 5.50 Coupon into register 2.
8.282004?3 8.28 Settlement date into register 3.
6.012008?4 6.01 Maturity date into register 4.
100?5 100.00 Redemption value into register 5.
7.75?0 7.75 Yield into register 0.
t 92.77 Price (calculated).
~ 1.33 Accrued interest (calculated).
8?0 8.00 New yield into register 0.
t 92.01 Price to yield 8% (calculated).
~ 1.33 Accrued interest (calculated).
+ 93.34 Total price paid.
Example 2: The market is quoting 93 3 /
8
% for the bond described in example 1.
What yield will that provide? What would be the yield to maturity if 92% were the
quoted price?
Keystrokes Display
93.34 From previous example.
0?0
3\8z
93+?1t 7.55 Yield at 93 3 /
8
% (calculated).
92?1t 8.00 Yield at 92% (calculated).