Thank you Timothy. Here is the correct (I believe) code for that
equation.
def units(C, n, F, r):
return sum([C / (1 + r) ^ t for t in range(1, n+1)]) + F / (1 + r)
^ n
def price(C, n, F, r):
return 100 * (units(C, n, F, r) / F)
Here, units expresses the equation I linked to, and price gives the
scaled price, 100 being par.
For example, evaluating the expression below demonstrates the example
calculation from this site:
http://www.moneychimp.com/articles/finworks/fmbondytm.htm
units(70,4,1000,.0853)
That evaluates to ~950 as in the example, therefore giving a price of
~95:
price(70,4,1000,.0853)
And sure enough, plotting the price yield curve gives sensible
results:
plot(price(70,4,1000,var('y')),0,.2)
Now I would like to make a 3d plot where n and r are free. The
trouble is, when I try it, I get the following error. Would someone
point out my error?
plot(price(70,var('n'),1000,var('y')))
TypeError: range() integer start argument expected, got
sage.rings.integer.Integer.
Thanks, Brian
On Apr 3, 7:03 pm, Timothy Clemans <timothy.clem...@gmail.com> wrote:
> I'm not 100% sure but I think it would look something like
>
> def maturity_formula(C, P, r):
> return sum([C / (1 + r) ^ t + F / (1 + r) ^ n for t in range(1, n+1)])
>
> On Fri, Apr 3, 2009 at 8:54 PM, Brian <medo...@gmail.com> wrote:
>
> > I was hoping to get help with using SAGE to plot this equation:
> >http://www.streetauthority.com/images/education/ytm.gif
>
> > This is the yield to maturity formula, expressing that a bond's price
> > is the sum of the present values of its future cash flows.
>
> > P = price of the bond
> > n = number of periods
> > C = coupon payment
> > r = required rate of return on this investment
> > F = maturity value
> > t = time period when payment is to be received
>
> > All variables are fixed except P and r, so my plot will be the
> > function P(r).
>
> > Once this is working, my next goal is to unfix n and have it vary on
> > the z axis.
>
> > A more basic question that could get me started is, how do I express
> > that summation?
>
> > Thanks, Brian
>
> > (Source:http://www.streetauthority.com/terms/y/yield-to-maturity.asp)
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