Why Do We Need For Your Financial Calculator?

1. To begin, assume that it is now January 1, 1993, and that each bond in Table 1 matures on December 31 of the year listed. Further, assumes that each bond has $1,000 par value, each had a 30-year maturity when it was issued, and the bonds currently have a 10 percent required nominal rate or return.

1.What are conversion factors? Why were conversion factors developed? How do they impact on which bond is cheapest to deliver? Under what conditions would there be no cheapest to deliver? Explain in detail.

1(a) Regular Treasury bonds are purchased at face value in the beginning or an adjusted price prior maturity. And in every period, normally annul or semiannual, investor will receive a coupon as an interest and at the maturity a principal plus coupon.

Premium or discount occurs when nominal interest rate(or coupon rate) of the bond differs from the current market rate of interest demanded by lenders.Regardless of the required yield, the bond price will reach face value as its approaches the maturity date.

A bond is a claim on some fixed future cash flows. A commonwealth government bond (CGB) is a bond which pays semi-annual coupons, in which the maturity date/ coupon payment date is on the 15th of every month. A zero coupon bond is a bond with no coupons. The important information of a bond: 1. 2. 3. 4. 5. 6. • 1. 2. Transaction date: T Settlement date:T+2 Coupon payment dates Maturity date YTM Coupon rate Cum-interest or Ex-interest? If ex-interest If> 7 days to the next coupon payment-----> cum-interest

In return for that money, the issuer provides you with a bond in which it promises to pay a certain rate of interest during the life of the bond, and to repay the face value of the bond (the principle) at its maturity date. Among the types of bonds available for investment are: U.S. government securities, municipal bonds, corporate bonds, mortgage- and asset-backed securities, federal agency securities and foreign government bonds. Zero-interest or coupon municipal bonds are my number one choice because these bonds can be purchased for a small amount, then at its maturity date, or earlier call date these bonds usually pay the face value. Now to me, this is a smart investment choice especially for retirement.

Bond Ratings in Capstone are evaluated by comparing current debt interest rates with the prime number. All bonds are issued on a 10 year note; bonds that are issued to companies will pay a 5% brokerage fee. How do you read a bond the first three digits of the serial number on a bond indicates the interest rate example 14.7S2018 the interest rate would be 14.7% and is due December 31, 2018.

b. Generate a graph or table showing how the bond’s present value changes for semi-annually compounded interest rates between 1% and 15%.

Using the DPV formula above (FV=$150,000, i=0.05, n=3), that means that the value of $150,000 received in three years actually has a present value of $129,576 (rounded off). In other words we would need to invest $129,576 in a T-Bond now to get $150,000 in 3 years almost risk free. This is a quantitative way of showing that money in the future is not as valuable as money in the present ($150,000 in 3 years isn't worth the same as $150,000 now; it is worth $129,576 now).

A company can use the present value concept to determine the value of a property today that is expected to earn the minimum of the projected future cash flow or the amount of money that needs to be invested today to reach a desired future sum. Investors who are interested in acquiring businesses would use the present value of money concept.

I feel both of these calculators gave me similar answers but yet they also give me different numbers for certain areas like social security amount, pension amount, inflation cost, and the cost for living in the future. The calculators gave me different numbers for how much I should be saving and how much I would have the end of my retirement, but the number are in the same bracket.

The interest you an investor earns from bonds are mostly paid either once a year or twice a year in most cases. This means that if you are looking for a more regular source of income as an investment, then bonds would not be great for you unless you find bonds that pay off interest more

In determining the present value of future cash outflows, the market yield as at the reporting date on national government bonds, which have terms to maturity approximating the terms of the related liability, is used.

The usage of a pivot table is extremely broad and depends on the situation. The first question to ask is, "What am I looking for?" In the example here, let us ask, "How many Units did we sell in each Region fo

Bond Discount represents an additional cost of borrowing and should be recorded as bond interest expense over the life of the bond. To follow the matching principle, bond discount is allocated to expense in each period in which the bonds are outstanding. This is referred to as amortizing the discount. Amortization of the discount increases the amount of interest expense reported each period. As the discount is amortized, its balance will decline and as a consequence, the carrying value of the bonds will increase, until at maturity the carrying value of the bonds equals their face amount. The journal entries are as follow: