Bonds that pay interest prior to maturity are known as coupon bonds. When you purchase a bond, you should know how long you’ll have to wait to receive your first interest payment. Calculating the number of days between a coupon period’s beginning and the settlement date gives you valuable information on how soon you’ll start seeing a return on your investment.
- [Instructor] Bonds that pay interest prior to maturity…are known as coupon bonds.…When you purchase a bond,…you should know how far into…a coupon period you're buying the bond,…so you can tell how long you'll have to wait…to receive your first interest payment.…In this movie I will show you how to calculate…the number of days til the next coupon payment.…My sample file is CouponDays_04_01…and you can find it in the chapter four folder…of your exercise files collection.…I need to know four different bits of information…to calculate the amount of time between two coupon days.…
The first is the settlement date…and that is the date that…you take possession of the security.…Next is the maturity date,…that is the date that the bond ends its run…and returns the principal and accumulated interest to you.…Next is the coupon frequency,…that is the number of coupons per year…and that number can either be…zero, one, two, or four.…And that is zero coupon or no coupons,…annual, semi-annual, or quarterly.…There is no setting for three.…
- 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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