Bonds

[Randall]

Salvo-

I am a new Prime user and an occasional buyer of US municipal bonds.

I have a few questions:

From section 4 page 82 of the HP12C manual the examples are:


Treasury Bonds (actual/actual) semi annual payments

28 April 2004 settle date
04 June 2018 mature date
6.75% coupon
4.75% desired yield at maturity
? what is the bond price

HP 12C answer: 120.38 123.07 (bond price + accrued interest)
Salvo Prime answer: 120.28 2.69 accrued interest = 122.97 (bond price + accrued interest)

Bond Yield Example:

28 April 2004 settle date
04 June 2018 mature date
6.75% coupon
122.125 = price what is yield?

answer:

hp12c yield = 4.60 Salvo Prime answer = 4.59


Section 16 Page 175 has an hp12c program for 30/360 bonds such as municipal bonds. In using your program I understand that checking the financial box causes 30/360 calculations.

Example:

28 August 2004 settle date
01 June 2008 mature date
5.5% coupon
desired yield = 4.75 what is the bond price?

hp12c answer: 102.55 accrued interest 1.33
Salvo Prime answer: 102.703 accrued interest 1.375

desired yield = 4.50 what is the bond price?

hp12c answer: 103.41 accrued interest 1.33
Salvo Prime answer: 103.62 accrued interest 1.375

Your writeup says your answers are within .1 of the hp12c manual. Except for the example directly above (102.55 versus 102.70 and 103.41 versus 103.62) that is the case.

From the examples have I used your program correctly?

If the financial box is checked are bond calculations made on a 30/360 basis?

Read your bio on qrz.

Thanks Randy WA0RAD