ODDLYIELD
The ODDLYIELD function calculates the yield of a security with an odd first period, such as T-bills that have a short or long first coupon period.
Syntax 🔗
=ODDLYIELD(settlement, maturity, issue, first_coupon, rate, price, redemption, basis)
settlement | The security's settlement date. |
maturity | The security's maturity date. |
issue | The security's issue date. |
first_coupon | The date of the security's first interest payment. |
rate | The security's annual coupon rate. |
price | The security's purchase price per $100 face value. |
redemption | The security's redemption value per $100 face value. |
basis | The day count basis to use. Default is 0 (US (NASD) 30/360). |
About ODDLYIELD 🔗
If you're dealing with financial instruments like T-bills or bonds that have unusual first coupon periods, the ODDLYIELD function in Excel comes to the rescue. It enables you to determine the yield of securities with atypical short or long initial coupon periods, aiding in precise financial analysis and decision-making processes. This function is particularly useful in scenarios where the securities' interest payment structure deviates from the norm and requires specialized calculations for accurate yield estimation. By leveraging ODDLYIELD, you can gain insights into the returns generated by these unique securities, offering a comprehensive view of potential investment outcomes.
Examples 🔗
Imagine you hold a security with a settlement date of January 1, 2022, a maturity date of December 31, 2022, an issue date of November 1, 2021, a first coupon payment date of February 28, 2022, an annual coupon rate of 4%, a purchase price of $97 per $100 face value, a redemption value of $100, and you're using the US (NASD) 30/360 day count basis. To calculate the yield, you would use the formula: =ODDLYIELD("01/01/2022", "12/31/2022", "11/01/2021", "02/28/2022", 0.04, 97, 100, 0).
Consider another case where a security has a settlement date of March 15, 2022, a maturity date of September 30, 2022, an issue date of January 1, 2022, a first coupon payment date of April 30, 2022, an annual coupon rate of 3%, a purchase price of $98 per $100 face value, a redemption value of $100, and you're using the actual/actual day count basis. The ODDLYIELD formula would look like: =ODDLYIELD("03/15/2022", "09/30/2022", "01/01/2022", "04/30/2022", 0.03, 98, 100, 1).
Notes 🔗
Ensure that the dates provided in the function are accurate Excel date values or references to cells containing valid dates. ODDLYIELD assumes regular coupon payment schedules but accommodates securities with irregular first coupon periods.
Questions 🔗
ODDLYIELD is designed to compute yields for securities that have peculiar first coupon periods, such as T-bills with short or long initial interest payment spans. By accounting for these irregularities, the function delivers accurate yield estimations even in non-standard interest payment scenarios.
Can I use ODDLYIELD for securities with typical coupon payment structures?Yes, ODDLYIELD caters to securities with standard coupon payment patterns as well. While specializing in atypical first coupon periods, it remains versatile enough to be used for securities adhering to regular interest payment schedules, ensuring flexibility in yield calculations.
What impact does the day count basis have on the ODDLYIELD function?The day count basis influences the computation of accrued interest and yield in the ODDLYIELD function. By selecting a suitable basis, you can tailor the calculation to align with specific day-count conventions, enhancing the accuracy of yield estimations based on the chosen method.