# Bond Q - Unrelated to Exam

Okay, so my buddy at work asked me how to find the YTM, I, on a bond that we’d buy for 103 currently and it has a semi-annual coupon of 8.75%. The issue is that we’d only hold it for 10 months, but would capture both coupon payments (something like paying in October and April). This should be a level 1 thing on my calculator, but how do I account for only 10 months…so what are we getting on it when all is said and done? What would be the method to do on my calc, or is this a more involved process for someone unlilke me that stays away from this ish? Thanks

I believe YTM is always to maturity and what you’re searching for is holding period yield (HPY), that’s all I know.

Okay…cool, so I’m not even using the right terminology. Do you know how I do that on the calc?

No, that’s literally all I know.

Pink… it’s not a one step process. First… You’re question seems to assume that you know how to calculate the price of the bond at purchase given the desired yield, yes? So do that to calculate purchase price. Then… you should know what the cash flows over the next ten months are (coupon payments, assuming no default). Now… just decide what you think the bond will yield in ten months and use the calculator to give you the price. Viola. Holding period return.

This is Zim.

turn on bloomberg. type in the bond cusip [corp] ya. there you go. next question