Using Templates | Description | Variables | Examples
Description
This template is for Bond calculations. Bond computations are used to calculate corporate or municipal bond investments. These computations include two day-count methods (actual or 30/360) and four coupon per year settings (once, twice, four, or twelve times per year).
Variables
- Date Basis: computations based on actual/actual month/year method or the 30/360 method.
- Pmt Basis: How often the coupon payments occur: 1, 2, 4, or 12 times per year.
- Sett Date: the settlement or purchase date.
- Mat Date: the maturity or call date. This date always occurs after the settlement date. This date is called a call date when the issuer can pay off the bond before the maturity date. Maturity date can also be called the redemption date.
- Cpn Rate%: the annual coupon rate as a percentage. This is the annual interest rate printed on the bond and is used to determine the coupon payment (the periodic payment of interest). This value is entered as a percentage. For example, 7.25% is entered as "7.25".
- Rdmptn Val: the redemption value is a percentage of the bond's par value that is paid to the owner when it is retired. If the calculation is to the maturity date, this value is 100. This is the standard set by HP. If the calculation is to a call date, this value varies. The par value is the value printed on the bond itself. A bond is often said to sell at a premium or discount. This is reflected in the redemption value. A bond that sells at a discount sells at less than par value. Bonds that sell at a premium are for more than par value.
- Yield%: the yield to maturity or redemption. This is the rate of return to the investor based on earnings from payments of principal and interest. This includes a sale at a premium or discount. To calculate yield, a value for price must be entered. This value is entered as a percentage. For example, 8.385% is entered as "8.385".
- Price: the dollar price. To calculate the dollar price, a value for yield must be entered.
- Acc Intrst: the accrued interest based on $100 of par value. This value is calculated automatically when computing either yield or price.
Examples
Corporate Bond
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