Microsoft Office Tutorials and References
In Depth Information
Using DISC to Back into the Discount Rate
ppr This is the security s price per $100 face value.
redemption
redemption This is the security s redemption value per $100 face
value.
basis
basis This is the day count basis. You use 0 for U.S. bonds.
The settlement, maturity, and basisarguments are truncated to integers. If
settlementor maturityis not a valid date, DISC returns a #NUM! error. If pr
is less than or equal to 0 or if redemptionis less than or equal to 0, DISC
returns a #NUM! error. If basisis less than 0 or if basisis greater than 4,
DISC returns a #NUM! error. If settlementis greater than or equal to matur-
ity, DISC returns a #NUM! error.
DISC calculates
(Redemption value Par value) / Par value
and multiplies this by
(Number of days in year / Days from settlement to maturity)
In Figure 13.21 , Excel uses DISC to back into the discount rate.
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