The Excel YIELDDISC function calculates the annual yield of a discounted security.
The syntax of the function is :
Where the arguments are as follows:
|settlement||-||The settlement date of the security (ie. the date that the coupon is purchased)|
|maturity||-||The maturity date of the security (ie. the date that the coupon expires)|
|pr||-||The security's price per $100 face value|
|redemption||-||The security's redemption value per $100 face value|
An optional integer argument which specifies the financial day count basis that is used by the security. Possible values are:
The financial day count basis rules are explained in detail on the Wikipedia Day Count Convention page
Note that the settlement and maturity date arguments should be supplied to the function as either:
In the following spreadsheet, the Excel Yielddisc function is used to calculate the annual yield for a discounted security that has the settlement date 01-Jan-2011 and the maturity date 30-Jun-2011. The price per $100 face value is $97 and the redemption value is $100. The US (NASD) 30/360 day count basis is used:
|3||=YIELDDISC( B1, B2, 97, 100 )|
This calculates the yield on the discounted security described above, to be 6.22%.
Note that, in the above example:
Further examples of the Excel Yielddisc function can be found on the Microsoft Office website.
If you get an error from the Yielddisc function, this is likely to be one of the following:
Occurs when Analysis ToolPak add-in is not enabled in your Excel.