European Stars And Stripes (Newspaper) - May 10, 1987, Darmstadt, Hesse Page 20 the stars and stripes sunday May 10.1987 investor s Euitae by Bill Doyle q. A Friend of mine non he bought some no risk is. Treasury Bonds paying 12 percent interest can this be True Are Here any pit bib in Treasury Bonds Are they rally no risk ? a. Left Start off on the no risk Factor. Because there is absolutely no doubt that Treasury Bonds will be paid face off a value when they mature they arc counted As the safest securities in this wide world if you buy a ,000 face value Treasury Doyle Bond you know you will get $1,000 for it on its maturity Date. There is no risk that you will receive any less. However Between the Lime a Treasury Bond is issued and the Day it matures it can move up and Down in Market Price. When inner jul rate Rise the Market prices of already issued Bonds fall when in Terest Rales fall the Market prices of already issued Bonds Rise. The Fame thing applies to other marketable Bonds those bought and sold in the Market place such As corporate Bonds and municipal Bonds. If you want Money for your Treasur Bond before it reaches maturity you can t turn it in to the . Treasury a redemption. You Havi to sell it in the Market place. You run the Market risk that you might gel less than the Bond s face value. Lyls Hope your Friend is aware of that one Poten tial pitfall. Q. How u a bond1 yield Lama purity calculated a. By prorating Between the Market Price and the face value Over the life of the Bond. If you buy a Bond at a Premium Price Over its fact value the amount of the Premium ii pro ruled annually Over the life of the Bond and subtracted from the cur rent yield. If you buy a Bond at a discount below its face value the amount of the discount prorated annually Over the life of the Bond and added to the yield. As an example let s use a Bond that matures in exactly 10 years pays 9 percent interest and is Pur chased at 110 percent of its face value. That Bond s current yield is about 8.2 percent however the 10 percent Premium paid for the Bond reduces the 9 percent interest Rule by approximately i percent a year that makes the Bond s yield la maturity about 8 percent. If the same Bond was purchased at 90 percent of face value its cur rent yield would be exactly 10 per cent. And roughly i percent per year would be added 10 yield to maturity boosting that number to around 11 percent. These Are approximate calculations and do not Lake into account compounding of interest each year on the difference Between Pur Chase Price and face value. Exact yields to maturities Are found in detailed tables in basis books on file at Banks and brokerages. In this example the exact yields to maturity would be 7,53 percent for the Bond purchased at 110 per cent of face value and 10.65 per cent for the Bond purchased at 90 percent of face value. Business news Mart advances for the week despite 12-Point loss Friday new York Topi the Stock mar Ket advanced last week buoyed by an improved corporate Profil Outlook a steady Dollar and firm Bond prices. The Dow Jones Industrial average Rose 41.9010 close at 2322.30. After posting a Small Rise monday the Dow Rose 51.85 Points tuesday its found Best Point gain Ever. The Advance came As Bond prices Rose the Dollar strengthened slightly and investor grew More confident about corporate Cam Ings prospects. The Market closed narrowly mixed wednesday and thursday As equity investors wailed to Sec what kind of de Mand would emerge for the . Notes. And Bond the Treasury sold in its quarterly refinancing. The Dow dropped 12 Points Friday analysts said the Market was resting after tuesday s Sharp Advance advancing issues outpaced decliners 1,130-796 among the 2,168 issues traded on the new York Stock Exchange. The Market traded in a Moody emotional Errati fashion throughout the week said Peroni jr., head of technical research at Janney Montgom Stock pulse by in retd it a hot Tami to Sluss Shoujun us prod fridq.tbirl.1h7 Tost compost a in Matwi a a Kmim a Clou Enn of in 7.214,100. 15 2.13 17.0 8.9 1.117.doo i is53.boo 24s 014 its 49 2.m1wo 43x 2.3 5.100 d 34h 2.10,400 32v ,000 03 up g ism 1.wt.600 it 1.430,700 103 1.70 to so 343 10.0 83 3.t 4.58 21.0 2.9 47.0 33 Tat to 2.7 him ctr Polo of Gnu my to unto com Csc b. Dewih m to 194 a t 5,75 10 1,4 � silk la of 93 t 4x 10i t s b1h 3� � 3 34 3ibT a f 2s 09.0 08 12,61 2s 4.54 21.11 2.7� 90.0 Vij 4-21 ?�.d As no 1.87 45.0 fund prices from Page 19 Muniza 61 Sun old Tarj m i Fia Mun by not of iij3nl 1b.b1 . 18 5 my i2.o2n.l s43nl. 1.ob . 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He predicted thai the Market would then move higher but that gains would be concentrated among Blue Chip issues or linked to special on the big Board Avistar was the most Active nose listed Issue rising 1 to 8. Us followed climbing 4 / to 3m us said it expects its steel operations to be running at 85 percent or capacity by june. Bethlehem steel Rose 2% to 16 after it was recommended by Paine web Ber steel analyst Peter Marcus. Inland steel climbed 5s to 33v. At Twa the third most Active Issue edging up a to 24tt. Texaco Rose i to 3sw amid rumours that an australian investor May be accumulating shares of the Oil giant now operating under chapter 11 of the Federal bankruptcy code. Pennzoil Texaco s largest unsecured Amu can Kwh to att pm b to in Dom win la dig Enimo pm Huhg Sotow Vul to Hen my 1.026.000 3m t oj8 12.0i 690 Joo 18 114.400 wit 931.300 40k 185.100 e a 193,400 41a 280.100 in hw.500 us i04.7m in 1 b9 180am no in 11.0 os1201 Oil 260 3.11 14.0 3-0 oj7 12.0 in pro Ltd a Palm Offu off b � Chi cup Ejna pm to 6411 i 4 1.28 so-0 1,1 ii � 3s o.b7 1 .0 to 23.0 07 039 780 3.6 0.4 400 2.7s 22.0 t�9 191 2 27si i Iffatt 1 so 1 47 1 we in a 1h be 1 89 17.0 15 0 59 3io 29 i Dri Iai Eiml Ngi Lita to 12 men Flat Usu Udud. 11.91 12.11 u a 133 Oioi Hwn wort com cd Virtu Fogil to 6. Fish god hmm Atli Kottl actin mod spec incl it uni Fri Sot my 7m j59iia is 11�11.01 10 1 .47 11.52 to l. 7.62 . U 14j.17hl h a 3b541 .91 Uhl b 12 Lavo ii 1117 is to or Dup so 10 7311 to s3s so 170 11.44 131x11.12 Mcjunk 127inl r ib31nl r 10.12 no. R 1531 my i Rob i term to to Lun a ij12nl -71nl 1.23nl . . Ib.0jnl 21.12nl 25 02 21 63 my Slit 561 b.13 a 7.b1 6.b2 7.45 28 23 23.14 he 4 42 . 1252nl. 20522073 20k2046 57nlm 34 k so upijl711.it u3 goal Vuu r mum heart Oertl Pubill ill mfg attn Ond com Kaaa so s High Hinic in com 27.5jnl. Al Bank. In Tel no. 13b2nl 13b7nl lot no 71 s75 in Mil Muni 1327 11� 96e1nl if b.1i. I2bi no. By Gnu b59nu i17nl. 14 to pm 20 87 2j. 11 19 t?-23 by 5 in 193721.17 by b77 5ba ii &d3 524 Job 25emi 719 1? 15 ii is 7m b39 i96ikl. Creditor because of a huge judgment it won in the court Fishl Over the Purchase of Getty Oil Rose i i to s4. As crude Oil prices rallied on the new York mercantile Exchange Schlumberger climbed a i to 44vi, Phillips Petroleum Rose Vuk to 17, Amerada Hess climbed 1 it to 35vj and Exxon Rose it to 8654, ism jumped 3 to 163vt alter jumping 8ta the week before when its chairman said that first Quarter shipments in 1987 exceeded those during the same period last year. Compaq computer jumped 7k to 43 a Sitf Wertheim St. Co. Raised its earnings estimates for the company. Santa be Southern Pacific Rose 4vi to 45 / amid takeover rumours entering on Burlington Northern. International minerals & chemical Rose 6 i 10 41 h. The company said thursday that it Chi pets Buller than Brcak Cven results for the fiscal year ending june 30. Newmont mining Rose i Oft to 101 �4. Newmont said it expects to Post a Sec Ond Quarter pre tax gain of is 90 million on the Sale of a 25 percent stake in its australian Gold subsidiary. Broad Market indexes Rose. Standard poor s 500-Slock Index climbed 5.34 to 293.37 and the nose composite Index Rose 2,85 to 163.49. The number of shares changing hands an the new York Stock Exchange for the week totalled 906,617,310, compared with 919,562,6703 week earlier84626,960,940 the same week a year ago. The Dow transportation Index Rose 40.93 to 957.38. The Utility Index added 3.39to20s.49. Prices advanced in Active trading on the american Stock Exchange the american Stock Exchange Market value Index Rose 8.85 ict-334.02. Gainers led losers 394-371 among the 932 issues traded. Volume was 54,353,755 shares compared with 62,737,445 the previous week and 59,705,675 during the tame week a year ago. Wang laboratories Iasi b led the amex actives ring i to 8 i. Dome Petroleum followed gaining 1-16 to Ivi. Wickes was third unchanged at 3 / grow Ltd Khan to cup Ion 10.40 t in p cd growth com sanm to hit it 7.4bnl in Fol �3nl m8nl i l Sim f Kcf in act i Noma nov by k3 Bond St Prtt lib i huh to 11.7j lit n 11 Irb tie i 11-7b u to St hit l ust n 1.17 1mm pm fund i v4l in 17-08 cd non i 57 Vul ii 706nl of 27 2t 17 it Nita a my e.14 Tost v.44n.l 3149h.l i1.uhi. In uhf 10mhl 1sjonl thu d.i2hl 1 41 h i. 14.� a. 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