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# Solving for Yield on BABs

LondonPosts: 12 Associate

Hi. So this isn't actually an issue regarding CFA but I was hoping you might be able to help me.

For Uni I have to solve for the yield of BABs in order to calculate the profit/loss from different hedging positions. I was wondering if there's a function on the TI BAII Plus Pro for it, or what the easiest formula is to use?

To give you an example:

FV=900,000

PV=859,464

120 days to maturity.

• LondonPosts: 749 Sr Portfolio Manager

I'm assuming BABs use the typical bond calculation.

HPY = 900,000/859,464 = 1.04716

6 months = 1.04716 ^ (180/120) = 1.07157

6 months yield = 7.157%

annual bond yield = 7.157 * 2 = 14.314%

* Again, i could be wrong, so feel free to correct me.

• LondonPosts: 12 Associate
Thank you Vincentt, of course... I don't know why my mind came up blank, I knew that...

Guess my winter break was a bit too long haha!