Exceljet

Quick, clean, and to the point

Excel YIELDDISC Function

Excel YIELDDISC function
Summary 
The Excel YIELDDISC function returns the annual yield for a discounted security, such as a Treasury bill, that is issued at a discount but that matures at face value.
Purpose 
Get annual yield for discounted security
Return value 
Yield as percentage
Syntax 
=YIELDDISC (sd, md, pr, redemption, [basis])
Arguments 
  • sd - Settlement date of the security.
  • md - Maturity date of the security.
  • pr - Price of security.
  • redemption - Redemption value per $100 face value.
  • basis - [optional] Day count basis (see below, default =0).
Usage notes 

The Excel YIELDDISC function returns the annual yield for a discounted security (non-interest-bearing), such as a Treasury bill, that is issued at a discount but that matures at face value. In the example shown, the formula in F5 is:

=YIELDDISC(C7,C8,C5,C6,C9)

with these inputs, the YIELDDISC function returns 0.03264023 which, or 3.26% when formatted with the percentage number format.

Entering dates

In Excel, dates are serial numbers. Generally, the best way to enter valid dates is to use cell references, as shown in the example. If you want to enter valid dates directly inside a function, the DATE function is the best approach.

Basis

The basis argument controls how days are counted. The PRICE function allows 5 options (0-4) and defaults to zero, which specifies US 30/360 basis. This article on wikipedia provides a detailed explanation of available conventions.

Basis Day count
0 or omitted US (NASD) 30/360
1 Actual/actual
2 Actual/360
3 Actual/365
4 European 30/360

Notes

  • In Excel, dates are serial numbers
  • Settlement, maturity issue, and basis are truncated to integers
  • If settlement or maturity dates are not valid, YIELDDISC returns #VALUE!
  • YIELDDISC returns #NUM! if any of the following are true:
    • pr <= 0
    • settlement >= maturity
    • Basis is not 0-4

Excel Formula Training

Formulas are the key to getting things done in Excel. In this accelerated training, you'll learn how to use formulas to manipulate text, work with dates and times, lookup values with VLOOKUP and INDEX & MATCH, count and sum with criteria, dynamically rank values, and create dynamic ranges. You'll also learn how to troubleshoot, trace errors, and fix problems. Instant access. See details here.