BONDS
Bond Total Return Analysis
Combine coupons, reinvestment and price changes to compare holding-period returns under different exit yields.
One bond, several exit scenarios
Bond terms
Holding and purchase
Purchase and exit on coupon dates using whole coupon periods (e.g. 0.5 years for semiannual payments). Holding to maturity redeems face value. Reinvestment compounds at coupon frequency.
Change exit yield
Base is purchase YTM, solved from price when needed. Exit yield reprices the remaining bond without changing the reinvestment assumption.
Complete bond and holding terms to compare exit scenarios.
Assumptions and interpretation
Each coupon is reinvested from receipt to the holding end. Principal is received at sale or maturity and is not counted again as coupon income. No taxes, fees, default, calls or irregular coupons. All amounts share one monetary unit; no FX conversion.
HPR = (exit price + coupons + reinvestment income − purchase price) / purchase price
Coupon rate, YTM and total return: what differs?Explore further
Understand a concept, or calculate it on its own.
- Bond price
- YTM
- Duration