What is the process for finding a new yield on a bond given a price change? I can’t find this in the Schweser Book 5 (although I haven’t read ahead to book 5 yet)

use TVM function of calculator to find out new yield, that’s very testable .

YTM = IRR of corresponding cash flows …

ex: $1000 bond, 6% semi-annual coupon, 10 years to maturity, current YTM 5.5% FV = $1000 I = 2.75 N = 20 PMT = 30 solve: PV = $1038.07 Let’s say the question says the price of the above bond moves to $1060 Leave everything the same above, except set PV = 1060 and solve for I I = 2.61%(2) = 5.22% YTM

maratikus Wrote: ------------------------------------------------------- > YTM = IRR of corresponding cash flows … Yup, I like the CF register much better than TVM functions on the TI… for some reason I trust it more (ie trust myself using it more!)

i agree JRado. I don’t even use TVM anymore.