Manuals/calci/YIELD

YIELD(settlement, maturity, rate, price, redemption, frequency, basis)

• where $settlement$ is security's settlement date (a date when coupon or a bond is purchased),
• $maturity$ is security's maturity date (a date when coupon or a bond expires),
• $rate$ is security's annual coupon rate,
• $price$ is the price per $100 face value,
• $redemption$ is security's redemption value per $100 face value,
• $frequency$ is the number of coupon payments per year, and
• $basis$ is the type of day count basis to use.

YIELD() calculates the yield on a security or a bond that pays periodic interest.

Description

YIELD(settlement, maturity, rate, price, redemption, frequency, basis)

• Yield is the annual percentage return on an investment or security. Yield is the value obtained by dividing Annual Interest by Bond Price.

Formula:-

If B= Number of days from beginning of coupon period to settlement date,
   C= Number of days in coupon period,
   N= Number of days from settlement date to redemption date

:$YIELD={\frac {({\frac {redemption}{100}}+{\frac {rate}{frequency}})-({\frac {par}{100}}+({\frac {B}{C}}*{\frac {rate}{frequency}}))}{{\frac {par}{100}}+({\frac {B}{C}}*{\frac {rate}{frequency}})}}*{\frac {frequency*C}{N}}$

• $settlement$ and $maturity$ dates should be entered either in 'date format' or 'dates returned using formulas'. If dates are not valid, Calci displays #N/A error message.
• If $settlement$ date = $maturity$ date, Calci displays #N/A error message.
• $rate$ value must be greater than or equal to zero, else Calci displays #N/A error message.
• $price$ and $redemption$ values must be greater than zero, else Calci displays #N/A error message.
• The values for Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle frequency} should be 1,2 or 4.

For Annual payment, Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle frequency} = 1,

For Semi-annual payment, Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle frequency} = 2,

For Quarterly payment, Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle frequency} = 4.

• Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle basis} value is optional. If omitted, Calci assumes it to be 0.

Below table shows the use of Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle basis} values:

Basis	Description
0	US (NASD) 30/360
1	Actual/actual
2	Actual/360
3	Actual/365
4	European 30/360

• If Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle basis} value is other than 0 to 4, Calci displays #N/A error message.

Examples

YIELD(settlement, maturity, rate, price, redemption, frequency, basis) function with inputs in order is calculated as follows:

2/2/2008
11/2/2010
5%
97
$100
2
0

=YIELD(A1,A2,A3,A4,A5,A6,A7) : Calculates the Yield Value with the inputs in the range A1 to A7. Returns 6.2% as a result.

=YIELD(DATE(2012,6,10), DATE(2013,6,10), "6%", 98.85, 100, 2) : Calculates the Yield Value with the inputs. 
 Returns 7.21% as a result.

See Also

• YIELDDISC
• YIELDMAT

References

• Yield
• Current Yield
• Basis Convention