ODDLYIELD
The ODDLYIELD function calculates the yield of a security with an odd first period. It is useful for securities like T-bills with a short or long initial coupon period. This function helps in financial analysis by determining yield accurately.
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 🔗
Use the ODDLYIELD function in Excel to find the yield of securities with irregular first coupon periods, such as T-bills or bonds. This function helps you handle atypical short or long initial coupon periods, providing essential information for financial analysis and decision-making. When securities have an unusual interest payment structure, ODDLYIELD offers the necessary calculations for accurate yield estimation. This function allows you to understand the returns from these unique securities, giving you a clear 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 you provide 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.