Time value of money and financial calculator tutorials
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Time value of money and financial calculator tutorials
The article analyzes bond payment frequencies for S&P 500 companies to verify if semiannual payments are universally used. Using a dataset of 15,465 bonds, the study finds that 93.5% pay semiannually, justifying textbook assumptions. However, the Finance sector issues most of the exceptions, including monthly and other frequencies. Most sectors only use semiannual payments, supporting the emphasis in academic resources.
In recent years, bond issuers have changed from the traditional call schedule to a “make-whole” type of call. Generally, this is good for investors as it makes it less likely that high interest bonds will be called. If it is called, then they are “made whole” because they are paid the present value of the remaining cash flows. In a…
Duration and convexity are important numbers in bond portfolio management, but it is far from obvious how to calculate them on the HP 12C. Of course, there are formulas that you can type in (see below), but they aren’t easy for most people to remember and are tedious to enter. In this article I will show you how you can…
One of the key variables in choosing any investment is the expected rate of return. We try to find assets that have the best combination of risk and return. In this section we will see how to calculate the rate of return on a bond investment. If you are comfortable using the TVM keys, then this will be a simple…
A bond is a debt instrument, usually tradable, that represents a debt owed by the issuer to the owner of the bond. Most commonly, bonds are promises to pay a fixed rate of interest for a number of years, and then to repay the principal on the maturity date. In the U.S. bonds typically pay interest every six months (semi-annually),…
In recent years, bond issuers have changed from the traditional call schedule to a “make-whole” type of call. Generally, this is good for investors as it makes it less likely that high interest bonds will be called. If it is called, then they are “made whole” because they are paid the present value of the remaining cash flows. In a…
Duration and convexity are important numbers in bond portfolio management, and duration is pretty simple in Excel because there are built-in functions. Convexity, though, is another matter. Of course, there are formulas that you can type in (see table below), but they aren’t easy for most people to remember and are tedious to enter. In this article I will show…
One of the key variables in choosing any investment is the expected rate of return. We try to find assets that have the best combination of risk and return. In this section we will see how to calculate the rate of return on a bond investment. If you are comfortable using the built-in time value functions, then this will be…
Duration and convexity are important numbers in bond portfolio management, but it is far from obvious how to calculate them on the HP 17BII. Of course, there are formulas that you can type in (see table below), but they aren’t easy for most people to remember and are tedious to enter. In this article I will show you how you…
One of the key variables in choosing any investment is the expected rate of return. We try to find assets that have the best combination of risk and return. In this section we will see how to calculate the rate of return on a bond investment. If you are comfortable using the TVM keys, then this will be a simple…
This article explains how to calculate bond duration and convexity using a TI 83 Plus calculator. It highlights the complexity of using traditional formulas and presents an approximation method that involves calculating bond prices at current, slightly higher, and slightly lower yields. This method is accurate to multiple decimal places, simplifying the process. The article provides step-by-step instructions for storing and recalling bond prices, and emphasizes that these calculations can be made on coupon payment dates. It concludes by noting that the approximations are sufficiently accurate for practical use and can be adapted for other dates using dirty prices.
In recent years, bond issuers have changed from the traditional call schedule to a “make-whole” type of call. Generally, this is good for investors as it makes it less likely that high interest bonds will be called. If it is called, then they are “made whole” because they are paid the present value of the remaining cash flows. In a…
A bond is a debt instrument, usually tradable, that represents a debt owed by the issuer to the owner of the bond. Most commonly, bonds are promises to pay a fixed rate of interest for a number of years, and then to repay the principal on the maturity date. In the U.S. bonds typically pay interest every six months (semi-annually),…
Duration and convexity are important numbers in bond portfolio management, but it is far from obvious how to calculate them on the HP 19BII. Of course, there are formulas that you can type in (see table below), but they aren’t easy for most people to remember and are tedious to enter. In this article I will show you how you…
In recent years, bond issuers have changed from the traditional call schedule to a “make-whole” type of call. Generally, this is good for investors as it makes it less likely that high interest bonds will be called. If it is called, then they are “made whole” because they are paid the present value of the remaining cash flows. In a…