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  1. #1
    Member
    Join Date
    Mar 2017
    Posts
    112

    Default How to use a bond calculator

    Hi

    I'm very new to the bonds market and am trying to understand how to value a bond.

    In the example below (inserted image of bond calculation for AIA210 today), I would be very grateful if someone could help me understand how to interpret a bond calculator (ANZ securities bond calculator):

    1. The principal is how much I would pay to purchase the bonds at this moment = $985.14

    2. Accrued interest is how much interest this bond has already earnt since the last coupon payment = $16.01

    3. Cum interest price is simply principal + accrued interest = $1001.15

    3. Ex interest price the principal minus the interest that will be earnt between settlement date and the next coupon payment = $981.38


    => My question is what number do I compare to the information on https://www.nzx.com/markets/NZDX/bonds/AIA210 to see whether it is undervalued or overvalued? Ex interest price is same as present value?

    Thanks for helping with this


    Attachment 8745
    Last edited by Jonboyz; 14-03-2017 at 03:22 PM.

  2. #2
    Super Investor
    Join Date
    Feb 2008
    Location
    Gold Coast
    Posts
    1,303

    Default

    What you need a calculator for? Rate until expiration is the key ........and of course quality.
    h2

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