ODDFPRICE
The ODDFPRICE function calculates the price per $100 face value of a security with odd interest payment frequencies. It is useful for valuing bonds with irregular payment schedules.
Syntax 🔗
=ODDFPRICE(Settlement, Maturity, Issue, First_coup, Rate, Yld, Redemption, Frequency, [Basis])
Settlement | Date of purchase of the security. |
Maturity | Date when the security matures. |
Issue | Date of the security's issue. |
First_coup | Date of the security's first coupon payment. |
Rate | Annual coupon rate of the security. |
Yld | Expected annual yield of the security. |
Redemption | Redemption value at maturity per $100 face value. |
Frequency | Number of coupon payments per year. |
Basis (Optional) | The day-count basis to use. Defaults to 0 if omitted. |
About ODDFPRICE 🔗
Use the ODDFPRICE function in Excel to determine the price of securities with irregular interest payment schedules. This function calculates the value per $100 face value of bonds with unconventional payment timings. Input details such as purchase, maturity, issue, and first coupon payment dates, along with the annual coupon rate, expected yield, redemption value, and coupon payment frequency. You can also specify the type of day-count basis. Excel will then provide the price per $100 face value, allowing you to accurately value bonds with non-standard payment structures.
Examples 🔗
Assume you purchase a bond on January 15, 2022, with a maturity date of December 31, 2024. The bond was issued on July 1, 2021, and the first coupon payment is due on September 30, 2022. The bond has an annual coupon rate of 4%, an expected annual yield of 5%, a redemption value of $1,000, and pays semi-annually. To calculate the price per $100 face value, you would use the ODDFPRICE formula as follows: =ODDFPRICE("01/15/2022", "12/31/2024", "07/01/2021", "09/30/2022", 0.04, 0.05, 1000, 2)
Consider a bond purchased on March 10, 2021, with a maturity date of October 15, 2023. The bond's issue date is January 1, 2021, and the first coupon payment is on April 15, 2021. The bond offers a 3% annual coupon rate, an expected yield of 4%, a redemption value of $500, and pays quarterly. The ODDFPRICE formula for calculating the price per $100 face value in this case would be: =ODDFPRICE("03/10/2021", "10/15/2023", "01/01/2021", "04/15/2021", 0.03, 0.04, 500, 4)
Notes 🔗
Enter all dates as valid Excel date values or references to cells with valid date values. Use the ODDFPRICE function to handle irregular coupon payment schedules, providing flexibility in pricing securities with non-standard payment frequencies. Adjust the function parameters to match the specific attributes of the bond or security you are evaluating.
Questions 🔗
ODDFPRICE is designed to handle bonds with irregular coupon payment frequencies by providing a mechanism to calculate the price per $100 face value of securities with non-standard payment schedules. It accommodates scenarios where traditional pricing models may not be applicable due to irregular coupon timings.
What role does the First_coup date play in the ODDFPRICE function?The First_coup date in the ODDFPRICE function signifies the date when the security's first coupon payment is due. It aids in accurately valuing securities with irregular coupon schedules by incorporating the timing of the initial interest payment into the pricing calculation.
Can I adjust the day-count basis in the ODDFPRICE function?Yes, you can specify the day-count basis to be used in the ODDFPRICE function by providing a numeric code for the optional Basis argument. This allows you to customize the calculation based on your preferred day-count convention.