YIELDDISC

• How to use YIELDDISC formula?
• Examples of using YIELDDISC formula
• YIELDDISC formula not working?
• Similar formulas to YIELDDISC

Usage

Use the YIELDDISC formula with the syntax shown below, it has 4 required parameters and 1 optional parameter:

=YIELDDISC(settlement, maturity, price, redemption, [day_count_convention])

1. settlement (required):
   The settlement date of the security, represented as a serial number or a date.
2. maturity (required):
   The maturity date of the security, represented as a serial number or a date.
3. price (required):
   The price per $100 face value of the security.
4. redemption (required):
   The redemption value per $100 face value of the security.
5. day_count_convention (optional):
   Optional. The day count convention to use for calculating the number of days between settlement and maturity. If omitted, the function uses the actual number of days between the two dates.

Examples

Calculating the yield of a discounted security

The YIELDDISC function can be used to calculate the yield of a discounted security, such as a treasury bill or commercial paper. For example, a company can use this function to determine the yield of a commercial paper before investing in it.

Comparing yields of different securities

The YIELDDISC function can be used to compare the yields of different discounted securities. For example, an investor can use this function to compare the yields of two treasury bills with different settlement and maturity dates.

Analyzing the impact of different redemption values

The YIELDDISC function can be used to analyze the impact of different redemption values on the yield of a discounted security. For example, a company can use this function to determine the impact of a change in redemption value on the yield of a commercial paper.

Common Mistakes

Missing Arguments

Users often forget to include one or more required arguments, such as settlement or maturity dates.

Incorrect Date Format

Dates must be entered in the correct format, such as MM/DD/YYYY or using the DATE function.

Invalid Price

The price argument must be a positive number representing the price per $100 face value.

Invalid Redemption Value

The redemption argument must be a positive number representing the redemption value per $100 face value.

Unsupported Day Count Convention

Some day count conventions are not supported, such as actual/actual ISDA or actual/365L.

Related Formulas

The following functions are similar to YIELDDISC or are often used with it in a formula:

• YIELD

  The YIELD function calculates the yield of a security that pays periodic interest. The yield is the annualized percentage rate returned on the bond, assuming the bond is held until maturity. This function is commonly used in finance and investment analysis.

• PRICE

  The PRICE function calculates the price per $100 face value of a security that pays periodic interest. It is commonly used to determine the current value of a bond. The function takes the settlement date, maturity date, annual coupon rate, yield, redemption value, and frequency of coupon payments as input. It returns the price of the security, which is the sum of the present value of the coupon payments and the present value of the redemption value.

• DURATION

  The DURATION function calculates the Macauley duration of a security paying periodic interest, such as a US Treasury Bond, based on expected yield. The Macauley duration is a measure of the sensitivity of the price of the security to changes in interest rates. This function is commonly used in finance and investment analysis.

• ACCRINT

  The ACCRINT function calculates the accrued interest of a security that pays periodic interest. It is commonly used in financial analysis to determine the amount of interest earned but not yet paid on a security. The function takes into account the issue date, first payment date, settlement date, rate, redemption value, and frequency of interest payments. The result is the accrued interest at the settlement date.

• TBILLYIELD

  The TBILLYIELD function calculates the yield of a Treasury bill based on its price. It returns the annual yield of a Treasury bill (a type of short-term government security), based on its price, maturity, and settlement dates. This function is commonly used in financial analysis to compare the yield of Treasury bills with other types of investments.

Learn More

You can learn more about the YIELDDISC Google Sheets function on Google Support.