166 Section 16: Bonds
Annual Coupon Bonds
For bonds which have annual coupons, use the following hp 12c program to evaluate price and accrued interest on an Actual/Actual day basis. This program may be modified for annual coupon bonds to be calculated on a 30/360 day basis.
KEYSTROKES DISPLAY KEYSTROKES fs gÒ
DISPLAY fCLEARÎ fCLEARG gÂ
:0 n
:2
P
:1
¼
:3
M
$
:5
Æ
6
Þ
-
?6
:5
00- ?7
42 :6
43 :4
45 gÒ
04- 11 :7
45 z
06- 14 n
45 0
08- 12 P
45 M
10- 15 Þ
11- 13 :n
45 :2
13- 26 Þ
14- 6 §
15- 16 t
16- 30 -
44 fs
45
25- 10
26- 11
27- 0
28- 14
29- 15
30- 16
33- 16
34- 20
35- 31
36- 30
File name: hp 12c_user's guide_English_HDPMBF12E44
Printered Date: 2005/7/29
Page: 166 of 209
Dimension: 14.8 cm x 21 cm
Section 16: Bonds 167
REGISTERS n: Used
FV: Used
R
3
: Redemption
R
7
: Used i: Yield PV: Used
R
0
: # Periods (n) R
1
: Yield
R
4
: Settlement R
5
: Next Cpn.
R
8
–R
.5
: Unused
PMT: Cpn. or 0
R
2
: Coupon
R
6
: Last Coupon
For annual coupon bonds calculated on a 30/360 day basis, insert d after gÒ at steps 19 and 23 (making the program two steps longer).
1. Key in the program and press ?É if the C status indicator is not displayed.
2. Key in the total number of coupons which are received and press ?0.
3. Key in the annual yield as a percentage then press ?1.
4. Key in the amount of the annual coupon then press ?2.
*
5. Key in the redemption value then press ?3.
*
6. Key in the settlement (purchase) date † then press ?4.
7. Key in the date of the next coupon then press ?5.
8. Press t to obtain the amount of accrued interest.
9. Press t to determine the priceof the bond.
10. For a new case, return to step 2.
Example: What is the price and accrued interest of a 20-year Eurobond with annual coupons of 6.5% purchased on August 15, 2004 to yield 7%. The next coupon is received on December 1, 2004.
Keystrokes Display
?Æ
20?0
20.00
Set compound interest mode if the C indicator is not on.
Total number of coupons.
7?1 7.00 Annual yield.
6.5?2
6.50
Annual coupon rate.
100?3 100.00 Redemption value.
8.152004?4
8.15
Settlement date.
12.012004?5 12.01 Next coupon date. t –4.58
Accrued interest. t –94.75 Purchase price.
* Positive for cash received; negative for cash paid out.
† For information about date format see pages 29 to 30.
File name: hp 12c_user's guide_English_HDPMBF12E44
Printered Date: 2005/7/29
Page: 167 of 209
Dimension: 14.8 cm x 21 cm
