t

Settlement Date Excel uses the Settlement in its bond pricing functions. The settlement date is not the date the bond is purchased, but is the date the payment for the bond is actually made. If you purchase a Treasury bond, you will not actually pay for the bond until the next business day. The settlement date for corporate bonds is three days from the date of purchase, which is the same timeframe that is used for stock purchases. Finding the YTM You can use the YIELD function in Excel to calculate the yield to maturity of a bond. Suppose we have a bond with the following characteristics. What is the YTM of the bond? Settlement date: Maturity date: Annual coupon rate: Bond price % of par): Face value (% of par): Coupons per year: 1/1/2000 1/1/2015 6.80% 107.850 100 2 Yield to Maturity (YTM)