YIELD

Returns the yield on a security that pays periodic interest. Use YIELD to calculate bond yield.

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

YIELD(settlement,maturity,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.

Rate   is the security's annual coupon rate.

Pr   is the security's price per $100 face value.

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.

Basis

Day count basis

0 or omitted

US (NASD) 30/360

1

Actual/actual

2

Actual/360

3

Actual/365

4

European 30/360


Remarks

Example

A bond has the following terms:

February 15, 1991, settlement date
November 15, 1999, maturity date
5.75 percent coupon
95.04287 price
$100 redemption value
Frequency is semiannual
30/360 basis

The bond yield (in the 1900 date system) is:

YIELD("2/15/91","11/15/99",0.0575,95.04287,100,2,0) equals 0.065 or 6.5 percent