One common type of investment is a bond that pays interest at maturity. You're borrowing money by selling bonds rather than stock, so you need to know the break even price, which is the minimum to charge investors. If you create one of these bonds, you can calculate its price per $100 of redemption value by using the PRICEMAT function.
- [Instructor] One common type of investment…is a bond that pays interest at maturity.…If you create one of these bonds,…you can calculate its break-even price…per $100 of redemption value…by using the priceMAT function.…In this movie I'll show you how to create this calculation.…My sample file is InterestAtMaturity_05_06,…and you can find it in the Chapter05 folder…of your exercise files collection.…I have all the information that I need…for this particular calculation in my worksheet.…I'll just review it quickly.…
The first is the settlement date,…and that is the date that the investor…actually takes possession of the security.…Next is the maturity date,…and that is the date that the investment ends…and the investors are paid off.…Next is the issue date,…and that is the date…that the investment was actually created.…And you'll see here that in this case,…it's different from the settlement date.…So we're assuming that another investor bought the issue,…the date that it came out,…and then sold it to another investor.…
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- Analyzing loans, payments, and interest
- Calculating depreciation
- Determining values and rates of return
- Calculating bond coupon dates and security durations
- Calculating security prices and yields
- Calculating prices and yields of securities with odd periods
- Analyzing simulation results
Skill Level Intermediate
1. Analyzing Loans, Payments, and Interest
2. Calculating Depreciation
3. Determining Values and Rates of Return
4. Calculating Bond Coupon Dates and Security Durations
5. Calculating Security Prices and Yields
6. Analyzing Simulation Results
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