ODDFYIELD

Returns the yield of a security that has an odd (short or long) first period.

If this function is not available, run the Setup program to install the Analysis ToolPak. After you install the Analysis ToolPak, you must enable it by using the Add-Ins command on the Tools menu.

Syntax

ODDFYIELD(settlement,maturity,issue,first_coupon,rate,pr,redemption,frequency,basis)

Settlement   is the security's settlement date. The security settlement date is the date after the issue date when the security is traded to the buyer.

Maturity   is the security's maturity date. The maturity date is the date when the security expires.

Issue   is the security's issue date.

First_coupon   is the security's first coupon date.

Rate   is the security's interest rate.

Pr   is the security's price.

Redemption   is the security's redemption value per $100 face value.

Frequency   is the number of coupon payments per year. For annual payments, frequency = 1; for semiannual, frequency = 2; for quarterly, frequency = 4.

Basis   is the type of day count basis to use.

Remarks

• The settlement date is the date a buyer purchases a coupon, such as a bond. The maturity date is the date when a coupon expires. For example, suppose a 30-year bond is issued on January 1, 1996, and is purchased by a buyer six months later. The issue date would be January 1, 1996, the settlement date would be July 1, 1996, and the maturity date would be January 1, 2026, which is 30 years after the January 1, 1996, issue date.
• Settlement, maturity, issue, first_coupon, and basis are truncated to integers.
• If any argument is nonnumeric, ODDFYIELD returns the #VALUE! error value.
• If settlement, maturity, issue, or first_coupon is not a valid date, ODDFYIELD returns the #NUM! error value.
• If rate < 0 or if pr £ 0, ODDFYIELD returns the #NUM! error value.
• If basis < 0 or if basis > 4, ODDFYIELD returns the #NUM! error value.
• The following date condition must be satisfied; otherwise, ODDFYIELD returns the #NUM! error value:

  maturity > first_coupon > settlement > issue

• Microsoft Excel uses an interative technique to calculate ODDFYIELD. This function uses the Newton method based on the formula used for the function ODDFPRICE. The yield is changed through 100 iterations until the estimated price with the given yield is close to the price.

Example

A bond has the following terms:

January 25, 1991, settlement date
January 1, 1996, maturity date
January 18, 1991, issue date
July 15, 1991, first coupon date
5.75 percent coupon
$84.50 price
$100 redemptive value
Frequency is semiannual
30/360 basis

The yield of a security that has an odd (short or long) first period is:

ODDFYIELD("1/25/91","1/1/96","1/18/91","7/15/91",0.0575,084.50, 100,2,0) equals .09758 or 9.76 percent