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The Excel YIELDMAT Function
Basic Description
The Excel YIELDMAT function calculates the annual yield of a security that pays interest at maturity.
The syntax of the function is :
YIELDMAT( settlement, maturity, issue, rate, pr, [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 date of issue
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| pr |
- |
The security's price per $100 face value
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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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The date arguments must satisfy the following:
issue < settlement < maturity
Note also, that the settlement, maturity and issue date arguments should be supplied to the function as either:
- References to cells containing dates
or
- Dates returned from formulas
Warning:
| - |
If you input the date arguments as text, these may be misinterpreted,
due to the date system and date interpretation settings on your computer. |
| - |
It is not recommended that you input the date arguments as serial numbers, as date serial
numbering varies across different computer systems. |
Excel Yieldmat Function Example
In the following spreadsheet, the Excel Yieldmat function is used to calculate the annual yield for a security purchased
on 01-Jan-2011, with issue date 01-Jul-2008 and maturity date 30-Jun-2012. The interest rate at date of issue is 5.5%
and the security has a price of $101 per $100 face value. The US (NASD) 30/360 day count basis is used:
| |
A |
B |
| 1 |
Settlement Date: |
01-Jan-2011 |
| 2 |
Maturity Date: |
30-Jun-2012 |
| 3 |
Issue Date: |
01-Jul-2008 |
| 4 |
=YIELDMAT( B1, B2, B3, 5.5%, 101 ) |
This calculates the yield to be 4.21%.
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 [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 Yieldmat function can be found on the
Microsoft Office website.
Yieldmat Function Errors
If you get an error from the Yieldmat function, this is likely to be one of the following:
Common Errors
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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 dates are not valid Excel dates |
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#NUM!
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-
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Occurs if either:
| - | the issue date is ≥ settlement date |
| or | |
| - | the settlement date is ≥ maturity date |
| or | |
| - |
Invalid numbers are supplied for the rate, pr or basis arguments
(i.e. if either: rate < 0; pr ≤ 0; or basis is any number other than 0, 1, 2, 3 or 4)
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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 Yieldmat 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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