Bond Valuation / Calc Question

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bob5

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N = 10; PMT = 45; FV = 1,000; I/Y =5; CPT PV = $961.39

using the TI BA II Plus I get $1,399.13 which I know is wrong. the numbers above are given in the schweser study notes. any idea what i am doing wrong? it seems so straight forward i dont know why it isnt working.

thanks
 
try 2nd CLR TVM to clear your tvm data and start over...it works out
 
My thoughts exactly, make sure it's either annual or semi annual and then adjust the bond-equivilant rates/yields accordingly
 
N = 10; PMT = 45; FV = 1,000; I/Y =5; CPT PV = $961.39
above is the answer given in the book (schweser)

i have cleared all my settings, and am hitting the buttons in this exact order:

snd clr work, 10N enter, 45pmt enter, 1000 FV enter, 5 I/Y enter, CPT PV and get -1,399.13 everytime. I have a finance degree and used this calc for years. i am going crazy cant figure out what i am doing wrong. all my TVM answers are off. Please help. thanks
 
Bob your doing something wrong. With the semi annual coupon at 4.5% as you have it there and the semi annual yield at 5%, the bond will have to trade at a discount, consistent with schweser. Something on your end has to be off pretty badly to have such a high present value. If yo can't figure it out reset your entire calculator's setting. Everythign I see you putting in should give you a lower PV than the future value.



Edited 1 time(s). Last edit at Thursday, April 27, 2006 at 08:56AM by jamespucyk.
 
I don't have this calc (I use the HP).....but I bet you somehow have the calculator set to 12 compounding periods per year (instead of 1).

So when you input 5 into the "I" register the calculator is interpreting it as .42 (5/12).
 
thats it...12 compunding periods vs 1...THANKS
 
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