Microsoft Office Tutorials and References

In Depth Information

**Using YIELD to Calculate a Bond’s Yield**

•
frequency

frequency
—
This is the number of coupon payments per year. For an-

nual payments, frequencyis 1; for semiannual, frequencyis 2; and for

quarterly, frequencyis 4.

•
basis

basis
—
This is the type of day count basis to use. It defaults to 0,

which is appropriate for U.S. bonds.

The settlement, maturity, frequency, and basisarguments are truncated to in-

tegers. If settlementor maturityis not a valid date, YIELD returns a #NUM!

error. If rateis less than 0, YIELD returns a #NUM! error. If pris less than

or equal to 0 or if redemptionis less than or equal to 0, YIELD returns a

#NUM! error. If frequencyis any number other than 1, 2, or 4, YIELD returns

a #NUM! error. If basisis less than 0 or if basisis greater than 4, YIELD

returns a #NUM! error. If settlementis greater than or equal to maturity,

YIELD returns a #NUM! error.

Figure 13.16
shows an example of YIELD.

Figure 13.16.

Figure 13.16.
Use

Use YIELD

YIELD to calculate the yield rate for a bond. In these ex-

to calculate the yield rate for a bond. In these ex-

amples, the price in row 4 changes.

amples, the price in row 4 changes.