An Introduction to the Bond Markets

Appendix A

Using the Companion Website

www.wiley.com/go/introductiontothebondmarkets

Although it is not essential to use the companion website to appreciate the scope of the book, using it will enable the user to get a better feel of how bonds and derivatives react to changes in market conditions in an interactive way. It is hoped that its use will enable the user to get a better understanding of why traders and portfolio managers enact different trading and investing strategies.

In order to use the contents on the website, the user will need to have installed Microsoft Windows 98, Windows NT, Windows 2000 or Windows XP and Microsoft Excel 2002. (The routines were developed on Windows XP.) To use just select the required program and this will cause an Excel spreadsheet or user form to appear with certain data already filled in.

The following programs have been supplied on the website:

• Annuity.

  This program allows the user to enter the life, payment frequency and required interest rate for an annuity. It then calculates the annuity payments and the breakdown between interest and capital repayments. These may be displayed in tabular and graphical form.

• Yield1.

  This program allows users to enter the basic terms of a fixed-rate bond issue together with either its price or yield. It then calculates the accrued interest, the clean and dirty prices, redemption yields compounded both annually and semi-annually, and various associated calculations, such as Macaulay and modified durations ...