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The Excel PRICEMAT Function
Basic Description
The Excel Pricemat function calculates the price, per $100 face value of a security that pays interest at maturity.
The syntax of the function is :
PRICEMAT( settlement, maturity, issue, rate, yld, [basis] )
Where the arguments are as follows:
| settlement |
- |
The settlement date of the security (ie. the date that the coupon is purchased)
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| maturity |
- |
The maturity date of the security (ie. the date that the coupon expires)
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| issue |
- |
The issue date of the security
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| rate |
- |
The security's interest rate at the date of issue
|
| yld |
- |
The security's annual yield
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| [basis] |
- |
An optional integer argument which specifies the financial day count basis that is used by the security.
Possible values are:
| Basis |
Day Count Basis |
| 0 (or omitted) |
US (NASD) 30/360 |
| 1 |
actual/actual |
| 2 |
actual/360 |
| 3 |
actual/365 |
| 4 |
European 30/360 |
The financial day count basis rules are explained in detail on the
Wikipedia Day Count Convention page
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Note that the date arguments must satisfy the following:
issue < settlement < maturity
Note also, that the settlement, maturity and issue arguments should be entered into the function as either:
- References to cells containing dates
or
- Dates returned from formulas
Warning:
| - |
If you attempt to input the date arguments as text, these can be interpreted
differently, depending on the date system and date interpretation settings on your computer. |
| - |
Although you can enter dates directly, as serial numbers, this is not recommended, as date serial
numbering varies across different computer systems. |
Excel Pricemat Function Example
In the following example, the Excel Pricemat function is used to calculate the price per $100 face value of a
security that pays interest at maturity. The security's issue date is 01-Jan-2011, the settlement date is
01-Apr-2011, and the maturity date is 31-Mar-2015. The rate of interest at issue is 4.5% and the annual yield
is 2.5%. The US (NASD) 30/360 day count basis is used:
| |
A |
B |
| 1 |
Settlement Date: |
01-Apr-2011 |
| 2 |
Maturity Date: |
31-Mar-2015 |
| 3 |
Issue Date: |
01-Jan-2011 |
| 4 |
=PRICEMAT( B1, B2, B3, 4.5%, 2.5% ) |
The function calculates the price per $100 face value to be $107.17.
Note that, in the above example:
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As recommended, the settlement, maturity and issue dates have been input as references to cells containing dates.
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The rate and yld arguments are input as percentages 4.5% and 2.5%. However, these arguments could, instead, be entered
as the simple numerical values 0.045 and 0.025
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The [basis] argument has been omitted, and so the function uses the default value 0 (denoting the US (NADS)
30/360 day count basis).
Further examples of the Excel Pricemat function can be found on the
Microsoft Office website.
Pricemat Function Errors
If you get an error from the Pricemat function, this is likely to be one of the following:
Common Errors
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#NUM!
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-
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Occurs if either:
| - | the settlement date is ≥ issue date |
| or | |
| - | the settlement date is ≥ maturity date |
| or | |
| - |
Invalid numbers are supplied for the rate, yld or basis arguments
(i.e. if either: rate < 0; yld < 0; or basis is any number other than 0, 1, 2, 3 or 4)
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#VALUE!
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-
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Occurs if either:
| - | any of the supplied arguments are non-numeric |
| or | |
| - | the supplied settlement, maturity or issue arguments are not a valid Excel dates |
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#NAME?
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-
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Occurs when Analysis ToolPak add-in is not enabled in your Excel.
You will need to enable the add-in if you want to use the Excel Pricemat function.
To do this in Excel 2003 :
- From the Tools drop-down menu, select the option Add-Ins ...
- An 'Add-Ins' window will pop up. From this, select the option Analysis ToolPak and click OK
To do this in Excel 2007 or Excel 2010 :
- Click the Microsoft button on the top left of your spreadsheet and select
the Excel Options button
- From the menu on the left hand side, select Add-Ins
- In the 'Manage:' box, select Excel Add-ins and click Go...
- An 'Add-Ins' window will pop up. From this, select the option Analysis ToolPak
and click OK
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