Question
CASIO fx-9750GII for bond evaluation problems I am having a problem using my calculator for bond problems when it comes to using semi-annual payments. Here
CASIO fx-9750GII for bond evaluation problems
I am having a problem using my calculator for bond problems when it comes to using semi-annual payments. Here are two nearly identical questions, both calling for semi-annual payments. One is giving me a correct answer when I set it to semi-annual on my calculator, but the other is giving me the correct answer when the calculator is set to annual. Please help.
Question 1:
A 10% coupon rate bond makes semi-annual interest rate payments. Par value is $1000. The bond matures in 13 years. The required rate of return is 8.27%. What is the current price?
My Screen:
d1 01M01D2000Y
d2 01M01D2013Y
RDV = 100
CPN = 10
PRC = 0 (until I solve obvisouly)
YLD = 8.27
I am able to solve for the correct answer ($1,134.73), but when I solve for this correct answer, it is done under annual calculation in the set up menu when the question states semi annual interest rates.
BUT, when I solve this second almost identical question, I get the correct answer using semi-annual calculation in the set up menu, and if I switch it to annual it gives me an incorrect answer.
A 7.5% coupon rate bond makes semi-annual interest rate payments. Par value is $1,000. The bond matures in 7 years. The current price of the bond is $948.25. Calculate the bonds YTM
My Screen:
d1 01M01D2000Y
d2 01M01D2007Y
RDV = 100
CPN = 7.5
PRC = -94.825
YLD = 0 (until I solve obvisouly)
When I solve under semi-annual, I get the correct answer of 8.496%, but annual gives me an incorrect answer.
The only difference I can see in these questions is one is asking for price and one is asking for YTM, but both give semi-annual payments and only one is giving me the correct answer using the semi-annual setting on my calculator. Am I doing something wrong or is there a way to get the correct answer in both questions using the semi-annual setting. This has been confusing me a lot on various problems.
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