Talk:Yield to maturity
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[edit] annual rate vs. period rate
Is yield to maturity always in effective annual rate or might be in form of effective period rate? Jackzhp 17:40, 13 October 2006 (UTC)
[edit] How excel calculate bond price
PRICE is calculated as follows: Price=[redemption/(1+yld/frequencty)^(N-1+DSC.E)] +
Sum (k=1 to N) (100*rate/frequency/(1+yld/frequency)^(k-1+DSC/E)) - 100*rate/frequency*A/E
where:
DSC = number of days from settlement to next coupon date.
E = number of days in coupon period in which the settlement date falls.
N = number of coupons payable between settlement date and redemption date.
A = number of days from beginning of coupon period to settlement date.
[edit] Yield to Worst
The article currently defines this as: when a bond is callable, "puttable" or has other features, the yield to worst is the lowest yield of Yield to Maturity, Yield to Call, Yield to Put, and others. I have never seen such a definition before. YTW is the lowest yield that the holder of the paper can experience in the absence of default, interest rate moves, and stupidity. For instance, if the paper is puttable and trading at a premium to the put price, the result of this put will normally be discarded from consideration in the YTW calculation e.g., if the bond trades at $110 with a $100 put one month hence, you would normally ignore this put for YTW calculations, unless, for instance there was a call exercisable two months hence at $90 ... in which case the put is important because the holder can use it to avoid a worse outcome. JiHymas@himivest.com 05:36, 1 November 2006 (UTC)
