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14: Additional Examples 215
File name : 17BII-Plus-Manual-E-PRINT-030709 Print data : 2003/7/11
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, $1,151.74). Determine both the yield to maturity and
the yield to call for this bond.
First, calculate the yield to maturity:
Keys: Display: Description:
" y
!
" Displays BOND menu.
z •
ƒ
e
"
%(?%'( FH0;1<<419"
Sets semiannual bond
on 30/360 calendar.
@c
%(?%'( FH0;1<<419" Clears variables; sets
CALL to 100.
3.162003
{
FH::8"
(%?#'?$((% F4<"
Stores today as
purchase date.
1.012031
|
01:8(#?(#?$(%# CHA" Stores maturity date.
10.5
}
75<68#(&.(" Stores coupon rate.
)
115.174
*
"
52;7H8##.&#-"
Stores price. Displays
only two decimal
places, but stores all
three.
•
" @9A68,&((" Calculates yield to
maturity.