Chapter 13 - Buying and Selling Bonds

Example 1

John Q. Investor purchases a 6% $1,000,000 two year bond maturing August 15, 2013, at issue August 15, 2011.


In Calculator Techniques 13-4 it should state:

The date spreadsheet confirms 62 days to the next coupon payment. Note that there is no leap year problem. February has neither 28 nor 29 days; it has 30 days, regardless of the year.

Return the basis to ACT and recalculate DBD as 63. If you now return to the two dates you entered and hit compute the calculator will tell you that the settlement date was a Wednesday. The day of the week function works only on the ACT setting.