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FRM: TI BA II+ to price a bond

More From: Bionic Turtle
119 ratings | 32608 views
What is the (model) price of a 10-year \$1,000 face value bond with a coupon rate of 4.0% that pays semi-annually, if the yield is 6.0%? For more financial risk videos, visit our website! http://www.bionicturtle.com
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saby king (6 days ago)
I'm facing difficulty in calculation of YTM of bonds being sold at a PREMIUM. Eg. FV = 100, Coupon = 10%(semi annual basis), Time = 2 years. When I calculate I/Y I don't get any answer, just shows RST 0.00 and the decimal setting of calculator is changed to 2 decimal point on it's own. Please help me.
Vedant Tiwari (6 months ago)
Hi!
Bionic Turtle (6 months ago)
c'mon youtube, you can do better
Tana Williams (1 year ago)
Is there any way for you to tell us how to get this same answer with the same inputs by putting them in Excel?
Bionic Turtle (1 year ago)
HI Tana, Yes, the same is given on the calculator by =-PV(6%/2, 10*2, 1000*4%/2, 1000) = =-PV(3%, 20, 20, 1000) = 851.23
keriannee (1 year ago)
Your videos are fantastic. I just wanted to say thank you because these videos are helping me study for a finance exam tomorrow.
Bionic Turtle (1 year ago)
You're welcome! Thank you for watching, and we hope that you did well on your exam!
Marvette Cox (2 years ago)
Thanks a lot! This was Soooo helpful. Telling me to enter all the variables I have and then compute to solve for the missing was all I needed to stop stressing this. It is not as hard as I was making it.
This is good. Shouldn't the P/Y be changed to 2 before computing this problem?
Okay thank you. I'm learning bonds by watching YouTube videos. There's a lady who did a lesson and she adjusted it to 2 including the manual adjustment of the I/Y and PMT. This can become really confusing. It was a callable bond btw.
Bionic Turtle (2 years ago)
Thank you! We don't want P/Y = 2 in this approach because we are already "manually" adjusting PMT and I/Y to the semi-annual period.
Milan Artis (2 years ago)
Hi when I followed this problem step by step with the same calculator. The end number for the PV I got was like -1085. And that was the answer I got when I put the I/Y stored as 3. When I left the I/y as 6 percent I got the answer I was suppose to get which was the 851.23. Is there an explanation for this?
harshit ojha (6 months ago)
Your P/Y is set to 2.when it is such, calculator already takes semi annual compounding into consideration. So that's why you put in i/y =6% and got the answer. It's all right. But you have to change n=n*2,and pmt =pmt/2 when p/y =2. Only benefit with your p/y set to 2 is that you don't have to worry about interest rate though. Hope it helped 😊.
pixeliumLTU (1 year ago)
The calculator stores the P/Y from previous calculations even after the CLR WORK. Therefore you have to set P/Y to 1 to get the right answer.
Phong P (2 years ago)
Hi, what kind of app do you guys use to screencast the calculator?
John Gomez (3 years ago)
Execellent explanation. I thought, however, that the calculation in the BA II Plus was done using only the coupon rate and ignoring the Yield to Maturity rate.