PRICEMAT

The PRICEMAT function is used to calculate the price per \$100 face value of a security that pays interest at maturity. It is commonly utilized in financial analysis to determine the price of a security that does not pay periodic interest but instead accrues interest until maturity.

Syntax ðŸ”—

=PRICEMAT(`Settlement`, `Maturity`, `Issue`, `RATE`, `Yield`, `Basis`)

If you're handling securities that accumulate interest until maturity rather than paying periodic interest, look to Excel's PRICEMAT function for precise valuation insights. This tool is instrumental in evaluating the price per \$100 face value of such securities, facilitating strategic decision-making in financial realms. PRICEMAT proves invaluable for determining the market value of securities that follow the interest-at-maturity payment structure, aiding professionals seeking accurate pricing evaluations for investment instruments. Detailed input of settlement date, maturity date, issue date, annual coupon rate, and annual yield empowers the PRICEMAT function to deliver comprehensive assessments of security prices based on accrued interest until maturity. This function is well-suited for scenarios where securities do not distribute interest payouts systematically but instead accumulate interest until the security's maturity date. By incorporating various day-count basis options, users can tailor calculations to align with specific market practices and accounting standards.

Examples ðŸ”—

Assume you've purchased a security with a maturity date of June 30, 2023, an issue date of January 1, 2023, a settlement date of July 1, 2022, an annual coupon rate of 4%, an annual yield of 5%, and utilizing the US (NASD) 30/360 day-count basis. To calculate the price per \$100 face value of the security, use the PRICEMAT formula as follows: =PRICEMAT("7/1/2022", "6/30/2023", "1/1/2023", 0.04, 0.05, 0)

Consider a security with a maturity date of August 15, 2024, an issue date of January 15, 2024, a settlement date of June 1, 2024, an annual coupon rate of 3%, an annual yield of 4%, and applying the actual/actual day-count basis. Use the PRICEMAT formula to determine the price per \$100 face value of the security: = PRICEMAT("6/1/2024", "8/15/2024", "1/15/2024", 0.03, 0.04, 1)

Notes ðŸ”—

Ensure that dates are correctly formatted as valid Excel date values or refer to cells with valid date values to avoid calculation errors. Adjust the argument values in line with the specific attributes of the security being evaluated. PRICEMAT is best suited for securities that accrue interest until maturity and do not distribute periodic interest payments.

Questions ðŸ”—

How does the PRICEMAT function determine the price of a security?

The PRICEMAT function calculates the price of a security by considering the accrued interest from the issue date to the settlement date, factoring in the annual coupon rate, yield, and the specific day-count basis specified in the calculation.

Is the PRICEMAT function suitable for securities that pay periodic interest?

No, the PRICEMAT function is primarily designed for securities that accumulate interest until maturity without periodic interest payments. For securities with regular interest distributions, other functions like PRICE or PRICEDISC should be used.

Can I input different day-count bases for the PRICEMAT function?

Yes, the `Basis` argument in the PRICEMAT function allows for the selection of different day-count bases to align with specific accounting conventions or market practices. Choose the appropriate numeric code corresponding to the desired day-count basis.

What factors should be considered when using the PRICEMAT function to evaluate securities?

When utilizing the PRICEMAT function, consider accuracy in inputting relevant dates, annual coupon rates, yields, and ensuring alignment with the chosen day-count basis to obtain precise pricing estimates for securities following the interest-at-maturity structure.