How is the last column determined?作者: Muddahudda 时间: 2011-10-10 11:42
yield based off the ask price作者: Swanand 时间: 2011-10-10 11:47
How though? If we divide the coupon 2.375 by the ask price 101.9219 we get 2.330, rather than their value of 2.075.作者: Carson 时间: 2011-10-10 11:53
I was going to leave a sarcastice response but I felt sorry for you, answer is below:
Asked yield is the Yield to Maturity assuming the bond is bought at the Ask price;
So you would use your BAII plus calculator and calculate the YTM as follows:
N = 6.917 (assuming the above purchase date is today)
PV = -101.9219
PMT = 2.375
FV = 100 (assuming par value of 100)
I/Y = calc (2.074)
Or you could just use excel
But seriously, this is a fundamental concept; make sure you get this.作者: dirk01 时间: 2011-10-10 12:04
Also, you'll have to adjust the calculation above for monthly, semi-annual, etc. coupon payments.作者: jarobi04 时间: 2011-10-10 12:09
Palantir,
To add to what Zesty said, when you calculate the yield to maturity you have to factor in the coupon payments, the reinvestment of those coupons, as well as the payment of principal at the maturity. That's why it's not as simple as just dividing the coupon by the price.作者: ruchita 时间: 2011-10-10 12:15
Great, thanks for your help, definitely forgot about YTM v current yield.
