| Title: | Market Investing |
| Moderator: | 2155::michaud |
| Created: | Thu Jan 23 1992 |
| Last Modified: | Thu Jun 05 1997 |
| Last Successful Update: | Fri Jun 06 1997 |
| Number of topics: | 1060 |
| Total number of notes: | 10477 |
I need to determine the value of several bonds that were issued at different times and with different maturity dates. They were issued by a foreign government. Say, I have a $1000 bond that was purchased for $700 and it has a 5 year from purchase maturity date. If it is now 1/3 of the time from purchase to maturity, would I add (1/3)*(1000-700) = 100 to the purchase price to give me a current value of $800? Do I need to be concerned even with the number of months, or can I round off in terms of years. Or do I have to consult tables or the issuer to find the value on any specific date? The purpose of this need is for estate valuation at two or three times in the last few years. Thanks to all.
| T.R | Title | User | Personal Name | Date | Lines |
|---|---|---|---|---|---|
| 944.1 | AIAG::WEISSMAN | Tue Nov 21 1995 11:40 | 6 | ||
there are standard formulas for bond valuation - you can look them up - but one important factor that you left out in your note are current interest rates - as interest rates go up the value of bonds go down and as interest rates go down the value of bonds go up (this is actually intuitively obvious - if I have a bond paying 10% that has five years to maturity and interest rates on new bonds have dropped to 5%, then my bond paying 10% is worth more). | |||||