Monroe 3180 User manual

© 2006 Monroe Systems for Business •All Rights Reserved •Printed in U.S.A.
MONROE®
3180
User Manual

MONROE TRADER II
i
Contents Page
Introduction ...............................................................................................................................................1
General Entries .........................................................................................................................................2
Numbers .............................................................................................................................................2
Dates ..................................................................................................................................................2
Prices..................................................................................................................................................3
Status Modes......................................................................................................................................4
Fed/Muni Switch .................................................................................................................................4
Corrections & Error Messages ...........................................................................................................4
Overflow and Underflow .....................................................................................................................4
Description of Keys ...................................................................................................................................5
Security Code 0.........................................................................................................................................11
Price and Yield to Maturity..................................................................................................................11
Callable Bonds....................................................................................................................................12
Yield to Investor ..................................................................................................................................14
Bond Extensions.................................................................................................................................14
Dated Bonds .......................................................................................................................................16
After-Tax Calculations...............................................................................................................................17
After-Tax Yield ....................................................................................................................................17
After-Tax Yield to Price.......................................................................................................................18
Before-Tax Yield from After-Tax Yield................................................................................................19
Zero-Coupon Bonds..................................................................................................................................20
Annual-Coupon and Eurobonds................................................................................................................21
Duration.....................................................................................................................................................22
Value of a Basis Point ...............................................................................................................................23
Security Code 1.........................................................................................................................................24
Odd Coupons ............................................................................................................................................25
Price and Yield to Maturity..................................................................................................................26
Security Codes 2 – 4.................................................................................................................................27
Note Extensions..................................................................................................................................28
Mature Notes (codes 2, 3, and 4) .......................................................................................................28
Security Code 5.........................................................................................................................................30
Discount Extensions ...........................................................................................................................30
Code 5 After-Tax Calculations............................................................................................................31.
After-Tax Discount Rate...............................................................................................................31
Before-Tax Price from After-Tax Discount Rate ..........................................................................31
After-Tax Effective Yield...............................................................................................................31
Security Code 6.........................................................................................................................................32
Compound Interest/Annuity Functions......................................................................................................33
Future Value Calculation ....................................................................................................................33
Present Value Calculation ..................................................................................................................34
Payment Calculation...........................................................................................................................35
Number of Periods..............................................................................................................................36
Average Life ..............................................................................................................................................36
Entry Sequence ..................................................................................................................................38
Average Life Corrections ....................................................................................................................41

MONROE TRADER II
ii
Contents Page
Bond Memory............................................................................................................................................42
Introduction .........................................................................................................................................42
Storing Securities into Bond Memory .................................................................................................42
Recalling Securities from Bond Memory ............................................................................................43
Deleting One Security from Bond Memory.........................................................................................43
Store/Recall Issue Memory ................................................................................................................43
Production Analysis...................................................................................................................................44
Entry Sequence ..................................................................................................................................44
Production Corrections .......................................................................................................................48
Arithmetic ..................................................................................................................................................49
Addition...............................................................................................................................................49
Constant Addition ...............................................................................................................................49
Automatic Doubling ............................................................................................................................50
Subtraction..........................................................................................................................................50
Constant Subtraction ..........................................................................................................................51
Multiplication .......................................................................................................................................51
Constant Multiplication .......................................................................................................................52
Automatic Squaring ............................................................................................................................52
Raising Numbers to Integral Powers ..................................................................................................52
Division ...............................................................................................................................................53
Constant Division................................................................................................................................53
Reciprocals .........................................................................................................................................54
Mixed Calculations .............................................................................................................................54
Appendix A................................................................................................................................................55
Error Conditions..................................................................................................................................55
Appendix B................................................................................................................................................56
List of Securities .................................................................................................................................56
Day Count Basis.................................................................................................................................58

MONROE TRADER II
1
INTRODUCTION
The Monroe TRADER II is a versatile investment tool designed to provide a simplified method for
computing bonds and other financial instruments. The fixed income computations included in the
TRADER II provide fixed income professionals and investors the capability of performing basic trading
and investment calculations.
TRADER II groups security instruments into 6 general categories.
Type of Security Security Code
Municipal, Corporate, Agency Bonds 0
U.S. Government Bonds 1
Municipal Notes 2
Actual 360 Notes 3
Actual 365 Notes 4
Treasury Bills, Discount Securities 5
Stepped Coupon Bonds 6
TRADER II also contains more sophisticated fixed income computations, such as after tax calculations,
duration, production analysis, average life and volatility measures which enhance the capabilities of the
investment decision maker.
This manual provides an introduction to using the TRADER II as well as example problems. General
operating instructions are provided for entering dates, prices and correcting errors. Also, detailed
instructions are given for each function key.

MONROE TRADER II
2
GENERAL ENTRIES
NUMBERS
Numbers are keyed in as written using the decimal point key to define the position of the decimal point in
the number, if any. The decimal point key is not necessary for numbers without a fractional part.
CHG SIGN is used to make a postive number negative, or a negative number positive.
DATES
Dates are entered just like numbers, using the decimal point key to separate the month from the day-of-
the-month:
Month - Enter 1 or 2 digits, not to exceed “12” for December.
Day - Enter 2 digits, not to exceed “31”. If the day if from the first to the ninth (only one
digit), enter a leading zero to fill in the first digit.
Year - Enter 4 digits, the century and the year.
or
- Enter 2 digits, the last two digits fo the year. When the century digits are not entered,
TRADER II assumes the date is a valid date between January 1, 1970 and
December 31, 2069.
For example, enter the number of the month, a decimal point, a “two digit” day and the last “two digits” of
the year. “Two digit” means that the day and year must take up two pleaces. If the day or year is less
than 10, add a leading zero.
June 4, 1987 is entered as 6.0487
Pressing any key with the word date on it causes the date to be stored, according to the key depressed.
TRADER II displays it with a message indicating the key pressed and punctuates the date in a
conventional format.
EXAMPLE: June 24, 1987
ENTER PRESS RESULTS DISPLAYED
6.2487 SETTLEMENT Settlement Date Wed. 06-24-1987
DATE
EXAMPLE: Oct. 1, 2000
ENTER PRESS RESULTS DISPLAYED
10.0100 MAT Maturity Date Sun. 10-01-2000
DATE
END

MONROE TRADER II
3
Remember, when entering a date without a century, the TRADER II assumes a valid date between
January 1, 1970 and December 31, 2069. If you want to use a date not in this range, include the century.
January 1, 2070 may be entered as 1.012070.
EXAMPLE: Jan. 1, 2070
ENTER PRESS RESULTS DISPLAYED
1.012070 MAT Maturity Date Wed. 01-01-2070
DATE
END
In order to provide consistency in security and date calculations, some guidelines must be followed when
entering dates. These are:
The TRADER II will not accept dates which do not exist on an actual calendar. Incorrect entries will not
be stored and the date 00-00-0000 will display.
•The TRADER II will never allow a security calculation without first entering a settlement date.
•Dates may be entered in any order but compared to each other when a calculation is
performed. Dates, if necessary for a calculation, must be in the following order:
Issue/Dated Date <= Settlement Date <= Call Date <= Date
Earliest Latest
•When the TRADER II is turned on all date registers are set to the fictitious date 00-00-0000.
The presence of 00-00-0000 for a date is an indication that you do not want to use that date
in a calculation.
For example, an Issue/Dated date of 00-00-0000 will not be used when calculating accrued
interest.
PRICES
All prices are expressed in terms of Dollar Price (dollars per $100.00 par value).
Prices are entered prior to using the following keys: TO YIELD, CALL PRICE, 32NDS-to-decimal and
decimal-to-(DISPLAY), 32NDS
If you enter a price in 32nds, press the 32NDS key to convert it to a decimal before using it in the calculation.
Depending upon which key is pressed, the TRADER II responds with a message or does a calculation.

MONROE TRADER II
4
STATUS MODE
The CODE, CALL/MATURITY, and COUPONS ER YEAR keys are considered to set modes of operation
for keys which perform calculations. The “status” of all the modes is continuously displayed on line 1 of th
edisplay. Each mode is defined in the Description of Keys section and illustrated in the example
calculations.
The following is a typical example of the mode settings:
Security Code 0 (Municipal, Corporate, Agency Bond) Periodic Semi-annual coupons, Calculating to Maturity Date.
FED/MUNI SWITCH
This switch controls the number of decimal places of price results in Security Codes 0, 2, 3, 4, and 6.
Prices are rounded to 6 places in the FED position and truncated to 3 places in MUNI. Security Code 1
and 5 prices are calculated to 6 and 7 decimal places respectively.
CORRECTIONS & ERROR MESSAGES
If an error is made when keying a number or date, the TRADER II will display a message. For example, if
an invalid security code is entered (using the CODE key) the message Invalid Code, will be displayed.
The error message need not be cleared. Just continue, by entering the correct number. An invalid date
entry will result in a date of 00-00-0000. Whenever possible, the TRADER II will indicate which entry is
incorrect refer to Appendix C for a complete list of error conditions.
If an error is detected before an entry is complete, press the C/CE key and enter the number again.
OVERFLOW AND UNDERFLOW
Calculation results which are too large (overflow) or small (underflow) will cause the number to be
displayed in a special format.
Numbers have an internal capacity of fourteen digits (14) with a floating decimal point. When the decimal
point is greater than the maximum number of digits, TRADER II displays as 1.234567890123+14 which
represents the actual number 123,456,789,012,340. In other words, the 14 most significant digits of the
result will be displayed along with an E+nn or E-nn indicating the placement of the decimal. In the
example above, the acutal number was obtained by moving the decimal point to the right 14 digits. If
E-nn is displayed, move the decimal point to the left nn digits. Overflow will be displayed to indicate an
error.
Interest and
Day Count Settlement Date
Security Code 0 Semi-annual coupons To Maturity
Status Line
Result/Entry Line
C=0 PER 30/360 SEMI 06-24-87 MATURITY
Settlement Date 06
-
24
-
87

MONROE TRADER II
5
DESCRIPTION OF KEYS
DISPLAY This key is used with the other keys to display the current values stored in the TRADER II.
The result of pressing the DISPLAY key, if any, will be explained as each key is defined
below.
C/CE (Clear/Clear Entry) When an entry is not being made, single depression of C/CE clears
any pending arithmetic sequence in progress, any constant, as well as the entry disply,
allowing you to start the calculation over. This may be referred to as the clear function.
During a numeric entry, single depression of this key clears the display and allows you to
re-enter without disturbing the calculation in progress. This may be referred to as the
clear entry function.
A double depression (two consecutive depressions) of C/CE at any time executes the
clear function.
CODE The entry of this key determines the formula and day count basis used in subsequent
calculations. Refer to Appendix B for a more complete list of securities and their day
count basis. TRADER II groups security instruments into 6 general categories.
Type of Ssecurity Security Code
Municipal, Corporate, Agency Bonds 0 PER 30/360
U.S. Government Bonds 1 PER ACT/ACT
Municipal Noted 2 MAT 30/360
Actual 360 Notes 3 MAT ACT/360
Actual 365 Notes 4 MAT ACT/365
Treasury Bills, Discount Securities 5 DISC ACT/360
Stepped Coupon Bonds 6 STEP 30/360
Each category is based on:
1) Interest Classification – method and timing of interest payments
a) PER - Periodic Coupon
b) MAT - At Maturity
c) DISC - Discounted
d) STEP - Periodic with two coupon periods
2) The calendar – method used to count the number of days between two dates.
a) 30/360 -30 days in each month; 360 days per year
b) ACT/ACT -Actual days in each month; Actual days per year
c) ACT/365 -Actual days in each month; 365 days per year
d) ACT/360 -Actual days in each month; 360 days per year
3) Industry Rules
a) Municipal Securities Rulemaking Board
b) National Association of Securities Dealers

MONROE TRADER II
6
CALL/ Selects the calculation mode of subsequent calculations. This key toggles between
MATURITY the following three modes:
1.MATURITY – selects calculations to maturity date only.
2.CALL – selects calculations to call date only
3. CALL+MAT – selects calculations to call and to maturiyt.
When both values are calculated, they are displayed side-by-side (Call on the left and
Maturity on the right), the TRADER II retains the lower of the two for use in subsequent
calculations.
The mode of the CALL/MATURITY key may be set at any time before a price or yield
calculation.
COUPONS If a number entry is made before pressing this key, it changes the frequency of coupon
PER YEAR payments for Security Codes 0, 1, and 6; and compound periods per year for the
Compound Interest/Annuity functions.
ENTRY DISPLAY STATUS MEANING
1 ANNL Annual Coupons
2 SEMI Semi-Annual Coupons
4 QTR Quarterly Coupons
12 MNTH Monthly Coupons
Any other number SEMI Semi-Annual Coupons
ISSUE/ Accepts the issue date or dated date. An issue date is required in Security Codes 2, 3,
DATED and 4. The dated date is used to calculate accrued coupon interest in Codes 0, 1, and 6.
SETTLEMENT Stores the settlement date, using the standard date format (Refer to General Entries
DATE section), fo rall securities calculations. DISPLAY, SETTLEMENT DATE displays the
most recent entry.
COUPON Accepts a coupon rate, as a percentage, on a bond, the interest rate on a note, or the
interest rate for Compound Interest/Annuity functions. DISPLAY, COUPON displays the
most recent entry.
1ST COUPON Stores the 1st coupon date, using the standard date format. The 1st coupon date is used
DATE to determine if an “odd” coupon period applies to Code 0 and 1 securities when
computing price/yield. DISPLAY, 1ST COUPON DATE displays the most recent entry.
MAT Accepts the maturity date of a security using the standard date format. DISPLAY, MAT
DATE DATE END display the most recent entry.
END
TO PRICE Accepts a yield, such as 8.125, and calculates the price of a security. DISPLAY, TO
PRICE displays the most recent price.

MONROE TRADER II
7
32NDS Accepts a value in dollars and 32nds and converts to decimal dollars. For example, for
104 2/32, enter 104.02. The third and fourth decimal positions may be a “5” for an
additional 64th, a “35” for 1/128 or a “75” for 3/128. For Example:
FRACTIONAL PRICE ENTER DISPLAY
100 1/32 100.01 100.03125
100 1/32 + 1/64 100.015 100.046875
100 1/32 + 1/128 100.0125 100.0390625
100 1/32 + 3/128 100.0175 100.0546875
DISPLAY, 32NDS converts dollars as a decimal to dollars and 32nds.
TO YIELD Stores the entry of dollar price and calculates the yield of a security. DISPLAY, TO
YIELD diplays the last yield entered or calculated and the equivalent yield according to
the following table:
COUPONS PER YEAR EQUIVALENT YIELD
1 (ANNL) SEMI-ANNUAL
2 (SEMI) ANNUAL
4 (QTR) SEMI-ANNUAL
12 (MTH) SEMI-ANNUAL
NOTE: For Treasury Bialls, Security Code 5, this key calculates the discount rate and
displays the effective (coupon equivalent) yield.
CURR Pressing this key computes the current yield for a security after a price o
YIELD yield calculation.
CALL Accepts the call date using the standard date format (Refer to General Entries section).
DATE DISPLAY, CALL DATE BEGIN displays the most recent entry.
BEGIN
CALL Accepts a call price. DISPLAY, CALL PRICE displays the most recent entry.
PRICE
CONV Stores the second coupon rate, as a percentage, for computing a Code 6 securities (Step
COUPON Coupon). DISPLAY, CONV COUPON displays the most recent entry.
CONV Stores the conversion date, using the standard date format. The conversion date
DATE determines when the conversion coupon rate is applied to Code 6 security calculations.
DISPLAY, CONV DATE displays the most recent entry.
CONC Accepts a concession and deducts it from dollar price. If the price is 104.375 and the
concession is .25, the response will be 104.125. DISPLAY, CONC displays the most
recent entry. The concession amount is erased after any price or yield calculation.
NOTE: Concession affects the dollar price only, it does not recalculate a new yield. If
yield to “price less concession” is desired simply press TO YIELD when “Price less Conc”
is in the display.

MONROE TRADER II
8
EXT Accepts the entry of a quantity of securities, per thousand face value, (or uses previously
stored number) to compute extended price less concession (principal amount) and
accrued interest.
DISPLAY, Accepts the entry of a quantity of securities, per thousand face value, (or uses previously
EXT stored number) to compute net amount (extended total).
TAX Accepts income tax rate and capital gains rate, as percentages, to be used in all the
RATE after-tax calculators. Each percentage is two digits, separated by a decimal point.
DISPLAY, TAX RATE displays the most recent entries.
AFTER Computes an after-tax yield using the previously calculated (price and yield) values in
TAX conjunction income and capital gains tax rates. DISPLAY, AFTER TAX performs after-
tax-yield to price calculation.
DISPLAY, (After-tax-yield to price) Accepts the after-tax-yield and calculates before-tax dollar price
AFTER for a given tax rate or rates and a specific after-tax yield. Enter the after-tax yield and
TAX depress DISPLAY, AFTER TAX.
DUR Calculates the duration and modified duration of coupon security (Security Codes 0, 1,
and 6).
DISPLAY Calculates the duration and modified duration of a coupon security without accrued
DUR interest.
VAL Accepts the number of basis points (up to 99), and calculates the difference in dollar
price, between the last entered (or calculated) price and the dollar price at the yield plus
the entered basis points. If no entry is made, this key automatically assumes 5 basis
points for codes 0, 1, and 6; adds 1 basis point to the discount rate for Code 5.
DISPLAY, Accepts the number of 32nds, and calculates the difference in basis points between
VAL currently entered (or calculated) yield and the yield at the dollar price plus the entered
32nds (thirty second of a point). If no entry is made, this key sequence automatically
assumes 1/32nd for all security codes.
NAccepts a total number of compounding periods; or pressing this key without a number
entry, calculates the total number of periods. This number can represent days, weeks,
months or any other tie unit, but always corresponds to the number of COUPONS PER
YEAR entry. For example, if COUPONS PER YEAR is set to 2, then the total number of
compounding periods for five years is 10. DISPLAY, N will display the most recent entry
stored.
PRESENT Accepts a present value amount; or pressing this key without a number entry, calculates
VALUE the present value. a present value can be calculated for a future value and/or the resent
value of a series for future payments. DISPLAY, PRESENT VALUE will display the most
recent entry stored.

MONROE TRADER II
9
FUTURE Accepts a future value amount; or pressing this key without a number entry, calculates
VALUE the future value. A future value can be calculated for a present value and/or the
compound value of a series of prior payments, DISPLAY, FUTURE VALUE will display
the most recent entry stored.
PAYMENT Accepts a periodic payment amount; or pressing this key without a number entry,
calculates a periodic payment amount. DISPLAY, PAYMENT will display the most
recent entry stored.
BEGIN This key initializes the production (PROD) or average life (AVG LIFE) calculation
sequences. If BEGIN is followed by a PROD key, the issue memory is erased and ready
for new entries. if the BEGIN key is followed by the AVG LIFE key the Average Life
summation is erased.
Pressing BEGIN and the ADD ISSUE or STR BOND key erases all of the securities
stored in the specified memory area.
AVG This key, preceded by BEGIN, clears the average life summary and starts the average
LIFE life calcualtion sequence; enters the number of securities retired per period (sinkers) into
the average life computation.
PROD This key, preceded by BEGIN, clears the issue memory and is ready for new entries.
BEGIN, PROD starts the production calcualtion sequence.
Accepts the number (sequence #) of the production summary to display or pressing with
no entry displays the next summary.
DISPLAY, Computes a production analysis summary for the securities currently stored with the ADD
PROD ISSUE key. The sequence # and associated production summary follows:
SEQUENCE # PRODUCTION SUMMARY COMMENT
0. Total Par Dollar Amount
1. Bond Years
2. Average Coupon Weighted by Par
3. Average Interest Weighted by Bond Years
4. Total Coupon Coupon Interest for Life of Bonds
5. Average Price Weighted by Par
6. Total Extension Extended Price Plus Accrued Interest
7. Total Principal Extended Price
8. Average Redemption Decimal Years and Date
9. Average Yield Weighted by Par
10. Average Current Yield Weighted by Par
11. Annual Income Current Annual Coupon Interest
12. Average Duration Weighted by par
13. Total Accrued Interest
14. Gross Profit Redemption Value + Total Interest - Cost

MONROE TRADER II
10
STR Stores any security currently in working memory into a specific bond memory location
BOND according to the number (1-50) entered prior to pressing the key. If no storage location is
specified, the TRADER II will automatically store the bond into the next available location.
Storing a bond in location 1 will erase any bond previously stored but does not affect the
bonds stored in locations 2 through 50.
DISPLAY, Recalls a security to working memory from a specific bond memory according to the
STR number (1-50) entered prior to pressing the key.
BOND
ADD Stores the security currently in working memory into a specific issue memory location
ISSUE according to the number (1-50) entered prior to pressing the key. If no storage location is
specified, the TRADER II will automatically store the bond into the next available location.
Storing a bond in location 1 will erase any bond previously stored but does not affect the
bonds stored in locations 2 through 50.
NOTE: Issue memory is used to store securities which are used a sinput to the
production analysis calculations. Any security stored here must have a computed price
or yield and extended principal and interest.
DISPLAY, Recalls a security to working memory from a specific issue memory according to the
ADD number (1-50) entered prior to pressing the key.
ISSUE

MONROE TRADER II
11
SECURITY CODE O
Security Code 0 calculates Municipal, Corporate, and Federal Agency Bonds as well as any security
which pays periodic interest on a 30/360 (30 day month/360 day year) calendar. Refer to Appendix B for
a more complete list of securities and the day count basis.
PRICE AND YIELD TO MATURITY
EXAMPLE: A 8.5% Municipal Bond maturing on April 9, 11996 is sold to yield 9%. Find the dollar
price and the current yield.
ENTER PRESS RESULTS DISPLAYED
0 CODE Security Code 0
6.2487 SETTLEMENT Settlement Date Wed. 06-24-87
DATE
To FED/MUNI switch and status line should be set as follows for this example:
FED/MUNI SWITCH to MUNI
ENTER PRESS RESULTS DISPLAYED
8.5 COUPON Coupon Rate 8.500%
4.0996 MAT Maturity Date Tue. 04-09-1996
DATE
END
9 TO Price 96.983(M)
PRICE
CURR Current Yield 8.764%
YIELD
The same bond is bought at a price of 96.5. What is the yield to maturity?
ENTER PRESS RESULTS DISPLAYED
96.5 TO Yield 9.083% (M)
YIELD
NOTE: Since the settlement date, maturity date and coupon had already been stored, they need not be
re-entered.
C=0 PER 30/360 SEMI 06-24-87 MATURITY

MONROE TRADER II
12
The maturity date in the previous example should have been April 15, 1996, not April 9, 1996.
Recalculate the yield.
ENTER PRESS RESULTS DISPLAYED
4.1596 MAT Maturity Date Mon. 04-15-1996
DATE
END
Since the dollar price is already stored, there is no need to re-enter. The DISPLAY key together with the
TO PRICE key will recall the previous dollar price.
ENTER PRESS RESULTS DISPLAYED
DISPLAY, Price 96.500
TO
PRICE
TO Yield 9.082% (M)
YIELD
CALLABLE BONDS
For bonds with a call option, you must enter a call price and call date using the CALL PRICE and CALL
DATE BEGIN keys (in any order).
Press the CALL/MATURITY key, until CALL is displayed, this causes the TRADER II to calculate “to call”
only; maturity date is ignored.
If the CALL/MATURITY key is in the CALL+MAT mode, computing a price or yield calculates both “to
call” and “to maturity”, both values are displayed simultaneously, the “to call” on the left, and the “to
maturity” on the right. Only the lower of the two values is retained for further calculations.
EXAMPLE: A 6% Municipal Bond due April 25, 2016 is sold to yield 5.5%. It is callable on April 2,
1996 at a price of 102.50. Settlement date is June 24, 1987. Calculate price to call and to maturity.
ENTER PRESS RESULTS DISPLAYED
0 CODE Security Code 0.
6.2487 SETTLEMENT Settlement Date Wed. 06-24-87
DATE
The status lien should be set as follows for this example:
C=0 PER 30/360 SEMI 06-24-87 CALL+MAT

MONROE TRADER II
13
ENTER PRESS RESULTS DISPLAYED
0 COUPON Coupon Rate 6.00%
4.2516 MAT Maturity Date Mon. 04-25-2016
DATE
END
4.2596 CALL Call Date Thur. 04-25-1996
DATE
BEGIN
102.5 CALL Call Price 102.5
PRICE
5.5 TO Price 105.001 (C) 107.180 (M)
PRICE
Since the price “to call” is lower, that value is stored so you may extend the trade (See Extensions).
Verify which value is stored by depressing DISPLAY, TO PRICE.
ENTER PRESS RESULTS DISPLAYED
DISPLAY, Price 105.001
TO
PRICE
Find the yield “to call” and “to maturity” if the price is 104.25.
ENTER PRESS RESULTS DISPLAYED
104.25 TO Yield 5.605% (C) 5.697% (M)
YIELD
DISPLAY, Yield 5.605% .684% ANNL Equiv
TO
YIELD

MONROE TRADER II
14
YIELD TO INVESTOR
The CALL/MATURITY mode can also be used to calculate “yield to the investor” for a bond currently
held. To calculate the yield to investor, treat the bond as if it were called. Enter the market price on the
CALL PRICE key, and settlement date on the CALL DATE BEGIN key.
EXAMPLE: A 5.5% agency bond was purchased on July 12, 1971 for 81.75 and is currently selling
for 91.645. What is the investors yield, if the bond is sold on June 24, 1987.
ENTER PRESS RESULTS DISPLAYED
0 CODE Security Code 0.
7.1271 SETTLEMENT Settlement Date Mon. 07-12-71
DATE
The status line should be set as follows for this example:
ENTER PRESS RESULTS DISPLAYED
5.5 COUPON Coupon Rate 5.500%
6.2487 CALL Call Date Wed. 06-24-87
DATE
BEGIN
91.645 CALL Call Price 91.645
PRICE
81.75 TO Yield 7.146% (C)
YIELD
BOND EXTENSIONS
After a price or yeld calculation, securities may be extended, taking into account a concession, if any.
The extension calculates the principal and accrued interest amounts as well as the net amount.
To calcualte bond extension, do a price or yield calculation in the normal way. If there is a concession,
enter it in dollars per hundred par value and press CONC. The price less concession is displayed. With
or without the concession, enter the number of bonds (per thousand) and proceed with one or both of the
following functions:
KEY FUNCTION
EXT Extended price (less concession, if any) and accrued interest.
DISPLAY/EXT Extended net amount (extended price less concession plus accrued interest).
C=0 PER 30/360 SEMI 07-12-71 CALL

MONROE TRADER II
15
Once the number of bonds has been entered using one of the above methods, that number of bonds
remain stored and need not be re-entered to proceed to another extension. The number of price or yield
is calculated.
EXAMPLE: A 6% Municipal Bond maturing on October 25, 1990 at a price of 90. Find the yield, the
extended principal, accrued interest and net amount for 100 bonds sold on June 24, 1987.
ENTER PRESS RESULTS DISPLAYED
0 CODE Security Code 0.
6.2487 SETTLEMENT Settlement Date Wed. 06-24-1987
DATE
Set the FED/MUNI switch and status line as follows:
ENTER PRESS RESULTS DISPLAYED
6 COUPON Coupon Rate 6.000%
10.2590 MAT Maturity Date Thur. 10-25-1990
DATE
END
90 TO Yield 9.566% (M)
YIELD
Enter the number of bonds and press EXT
ENTER PRESS RESULTS DISPLAYED
100 EXT Prtn 90,000.00 Int 983.33
To see the extended principal plus the accrued interest:
ENTER PRESS RESULTS DISPLAYED
DISPLAY, Net Amount 90,983.33
EXT
What is the accrued interest, for 2000 bonds?
ENTER PRESS RESULTS DISPLAYED
200 EXT Prtn 180,000.00 Int 1,966.67
C=0 PER 30/360 SEMI 06-24-87 MATURITY

MONROE TRADER II
16
DATED BONDS
To calculate extensions for bonds which have an irregular first coupon (Dated Bonds), enter the dated
date then press ISSUE/DATED. Then proceed in the normal manner as for regular bonds. The dated
date may be entered at any time prior to performing the calculation for which is to be used. The dated
date will remain stored until it is removed by entering 0and pressing the ISSUE/DATED key.
EXAMPLE: Find the accrued interest for 10 Municipal Bonds dated January 15, 1987 and sold June
24, 1987. The coupon value is 8% the maturity date is June 1, 1994 and the yield is 9.25%.
ENTER PRESS RESULTS DISPLAYED
0 CODE Security Code 0.
6.2487 SETTLEMENT Settlement Date Wed. 06-24-1987
DATE
Set the FED/MUNI switch and status line as follows:
ENTER PRESS RESULTS DISPLAYED
1.1587 ISSUE/ Iss/Dated Date Thu. 01-15-1987
DATED
8 COUPON Coupon Rate 8.000%
ENTER PRESS RESULTS DISPLAYED
6.0194 MAT Maturity Date Wed. 06-01-1994
DATE
END
9.25 TO Price 93.693(M)
PRICE
10 EXT Prin 9.369.30 Int 353.33
DISPLAY, Net Amount 9,722.63
EXT
Clear the dated date:
ENTER PRESS RESULTS DISPLAYED
0. Iss/Dated Date 00-00-0000
ISSUE/
DATED
C=0 PER 30/360 SEMI 06-24-87 MATURITY

MONROE TRADER II
17
AFTER-TAX CALCULATIONS
The TRADER II has the capability of calculating several after-tax functions.
•Before-tax price to After-tax yield
•Before-tax yield to After-tax yield
•After-tax yield to Before-tax price
•After-tax yield to Before-tax yield
These calculations are always based on either or both of two different tax rates, the income tax and
capital gains rates. The TRADER II can be used to compute after-tax calculations for notes as well as
bonds. After-tax yield calculations cannot be done for Treasury Bills. (Refer to Code 5 After-Tax
Calculations.)
Before after-tax calculations can be performed, store the appropriate tax rates. The tax rates, like the
coupon rate, are entered as percentages, each rate is a two digit number separated by a decimal point,
and press TAX RATE.
Once entered, there is no need to re-enter the tax rate, unless the rate changes. To see the rates
previously stored, press DISPLAY, TAX RATE.
After-tax calculations can be done for all securities, by the selection of the appropriate Security Code. In
most cases, Municipal Bonds do not require an income tax rate. Just enter zero for the income tax rate.
Premium bonds and notes, in accordance with convention, are calculated using the tax rate for both the
tax on interest and the tax on the capital loss.
AFTER-TAX YIELD
To determine the after-tax yield of a security, begin by performing a normal TO PRICE or TO YIELD
calculation. When the proper tax rates are stored, press AFTER-TAX. (No entry is required, since all
information needed for the calculation is already stored.) The after-tax yield is displayed.
EXAMPLE: A Corporate Bond with a 7% coupon is offered at a price of 92.625. If matures on
January 5, 1992. What is the after-tax yield to a purchaser whose tax rate is 33% and capital gains is
28%? The settlement date is June 24, 1987.
ENTER PRESS RESULTS DISPLAYED
0 CODE Security Code 0.
6.2487 SETTLEMENT Settlement Date Wed. 06-24-1987
DATE