The Excel YIELDDISC Function

Related Functions:

YIELD
YIELDMAT

Function Description

The Excel YIELDDISC function calculates the annual yield of a discounted security.

The syntax of the function is:

YIELDDISC( settlement, maturity, pr, redemption, [basis] )

Where the arguments are as follows:

settlement

The settlement date of the security (i.e. the date that the coupon is purchased).

maturity

The maturity date of the security (i.e. the date that the coupon expires).

The security's price per $100 face value.

redemption

The security's redemption value per $100 face value.

[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

For a detailed explanation of the financial day count basis rules, see the Wikipedia Day Count Convention page.

Note that the settlement and maturity date arguments should be supplied to the function as either:

References to cells containing dates

Dates returned from formulas

Warning: If you attempt to enter text representations of dates into Excel functions, these can be interpreted differently, depending on the date system and date interpretation settings on your computer.

Excel Yielddisc Function Example

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-2017 and the maturity date 30-Jun-2017. The price per $100 face value is $97 and the redemption value is $100. The US (NASD) 30/360 day count basis is used:

	A	B
1	Settlement Date:	01-Jan-2017
2	Maturity Date:	30-Jun-2017
3	=YIELDDISC( B1, B2, 97, 100 )

The above Yielddisc function calculates the yield on the discounted security to be 6.22%.

Note that, in the above example:

As the [basis] argument has been omitted, the function uses the default value 0 (denoting the US (NADS) 30/360 day count basis);
As recommended, the settlement and maturity arguments have been input as references to cells containing dates.

For further examples of the Excel Yielddisc function, see the Microsoft Office website.

Yielddisc Function Errors

If you get an error from the Yielddisc function, this is likely to be one of the following:

Common Errors

#NUM!

Occurs if either:

The settlement date is ≥ maturity date;
Invalid numbers are supplied for the pr, redemption or [basis] arguments.
(I.e. if either: pr ≤ 0; redemption ≤ 0; or [basis] is any number other than 0, 1, 2, 3 or 4).

#VALUE!

Occurs if either:

Any of the supplied arguments are non-numeric;
The supplied settlement or maturity dates are not valid Excel dates.

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