Bonds that issue coupons, or pay interest to investors on regular intervals, offer bondholders the option to invest their earnings elsewhere. Some issuers decide to offer zero coupon bonds, which only pay interest at the end of the investment period. A zero coupon bond sale lists the price and the payment due when the bond matures, but doesn’t usually list the investment’s interest rate.
- [Voiceover] Bonds that issue coupons…or pay interest to investors at regular intervals…offer bond holders the option…to invest their earnings elsewhere.…Some issuers decide to offer zero coupon bonds…which only pay interest at the end of the investment.…A zero coupon bond sale lists the price…and the payment due when the bond matures…but doesn't usually list the investment's interest rate.…You can calculate that rate for yourself…using the rate function.…I'll show you the formula for doing that.…My sample file is rate 0107…and you can find it in the chapter one…folder of the exercise files collection.…
You calculate the rate using a function…of the same name.…So, I'll click in cell C 11,…and enter my formula which is equal and then rate…the a left parenthesis and from the tool set…that appears you can see that there are…three required arguments and three optional arguments.…The optional arguments are in square brackets.…The first is the number of periods…and that is 60, that is in cell C three.…So I'll click that cell, type, comma.…
- 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
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. Calculating Prices and Yields of Securities with Odd Periods
Additional resources1m 24s
- Mark as unwatched
- Mark all as unwatched
Are you sure you want to mark all the videos in this course as unwatched?
This will not affect your course history, your reports, or your certificates of completion for this course.Cancel
Take notes with your new membership!
Type in the entry box, then click Enter to save your note.
1:30Press on any video thumbnail to jump immediately to the timecode shown.
Notes are saved with you account but can also be exported as plain text, MS Word, PDF, Google Doc, or Evernote.