1.8 KiB
1.8 KiB
Current Yield
\text{Current Yield} = \frac{\text{Annual Coupon}}{\text{Current Price}} \times 100Where:
- Annual Coupon = Face Value × Coupon Rate
- Price < Par → Current Yield > Coupon Rate
- Price > Par → Current Yield < Coupon Rate
- Price = Par → Current Yield = Coupon Rate
Approximate Yield to Maturity (AYTM)
\text{AYTM} = \frac{\text{Coupon} \pm \text{Price Change per Year}}{\text{Average Price}} \times 100Where:
\text{Price Change per Year} = \frac{\text{Par Value} - \text{Purchase Price}}{\text{Years to Maturity}}\text{Average Price} = \frac{\text{Purchase Price} + \text{Par Value}}{2}Note: Use + if bond is at a discount (price < par) — gain at maturity Use − if bond is at a premium (price > par) — loss at maturity
T-Bill Yield
\text{T-Bill Yield} = \frac{\text{Face Value} - \text{Purchase Price}}{\text{Purchase Price}} \times \frac{365}{\text{Days to Maturity}} \times 100T-Bills have no coupon — sold at a discount, mature at face value
Accrued Interest
\text{Accrued Interest} = \frac{\text{Annual Coupon}}{\text{Periods per Year}} \times \frac{\text{Days Since Last Coupon}}{\text{Days in Period}}Where:
- Semi-annual bond: divide coupon by 2, use 182 days per period
- Annual bond: use full coupon, use 365 days per period
\text{Dirty Price} = \text{Clean Price} + \text{Accrued Interest}Nominal Rate (Fisher Effect)
\text{Nominal Rate} = \text{Real Rate} + \text{Inflation Rate}Present Value of a Bond (reference only — not calculated by hand)
PV = \frac{C}{(1+r)^1} + \frac{C}{(1+r)^2} + \cdots + \frac{C + FV}{(1+r)^n}Where:
C= Coupon payment per periodr= Discount rate per periodn= Number of compounding periodsFV= Face value (par) received at maturity