Hi, I would like to ask - as referring to Q&A Bank Part 4/ Solution page 16/ (v) nominal spread. It requires to derive the GRY for risk-free bonds. Did the GRYs for 2-yr and 3-yrs bond calc in the computer?? If yes, how? I know this is more incline to a basic math question on finding the roots for polynomial equations. I would like to ask if anyone might have links to derive the roots for 3rd order polynomial equation. I.e anyone have a solution on finding the GRy for the 3yr bond? At the moment, I dont know an efficient way to get this number if it happened under exam condition. Thanks. YY
The easiest way under exam conditions to find roots of functions is to use the table mode of the casio calculator.
Thanks. But... Hi Elroy, Thanks very much for the quick response. I had a go, but unfortunately, I not quite get the functionality of the Table Mode. Despite that I have googled for the manual for more information. according to the solution...the workings include e.g. 101.5i^2 + 119i -6.5 =0 -> ans - i=3.2137% 102i^3+301.3i^2+291.9i-12.1 -> ans -i=3.9796% I am unsure how this can be input into the calcaulation [fx-85GTplus] to obtain the answer? I might have missed sth obvious which I shoudl have known. Thanks very much again, YY
press [mode] press [3] (table) type in the function f(x) =0 using [ALPHA] -> [X] for variables. select starting point eg. 0.01 end point eg. 0.1 step size eg. 0.01 You will then be able to see f(x) for a variety of x and see approximately where f(x) = 0. You will now know x to an accuracy of 1%. press AC to go back to input (your formula will still be there) put in the tighter bounds you discovered above and decrease stepsize by factor of 10, say. Repeat until desired accuracy is achieved.
