Formula generator for YIELD function
The YIELD function calculates the annual yield of a security paying periodic interest, such as a US Treasury Bond, based on its settlement date, maturity date, coupon rate, price, redemption value, frequency of interest payments, and day count convention.
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YIELD formula syntax
The YIELD function in Excel calculates the yield of a bond, which represents the annual return on investment. The syntax for the YIELD function is: YIELD(settlement, maturity, rate, pr, redemption, frequency, [basis]) - settlement: The date on which the bond was purchased. - maturity: The date on which the bond will mature. - rate: The annual coupon rate of the bond. - pr: The price per $100 face value of the bond. - redemption: The redemption value of the bond at maturity. - frequency: The number of coupon payments per year. - [basis]: Optional argument that specifies the day count basis to use. The YIELD function returns the yield of the bond as a percentage.
Use Cases & Examples
In these use cases, we use the YIELD function to calculate the yield of a financial investment based on its price, maturity date, coupon rate, and settlement date. The YIELD function returns the annual yield as a percentage, allowing us to assess the profitability of the investment.
Calculating Yield for a US Treasury Bond
Description
Calculates the annual yield of a US Treasury Bond based on its settlement date, maturity date, coupon rate, price, redemption value, frequency of interest payments, and day count convention.
Result
YIELD(settlement, maturity, rate, price, redemption, frequency, [day_count_convention])
Estimating Yield for a Corporate Bond
Description
Estimates the annual yield of a corporate bond based on its settlement date, maturity date, coupon rate, price, redemption value, frequency of interest payments, and day count convention.
Result
YIELD(settlement, maturity, rate, price, redemption, frequency, [day_count_convention])
Analyzing Yield for a Municipal Bond
Description
Analyzes the annual yield of a municipal bond based on its settlement date, maturity date, coupon rate, price, redemption value, frequency of interest payments, and day count convention.
Result
YIELD(settlement, maturity, rate, price, redemption, frequency, [day_count_convention])
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FAQ
Frequently Asked Questions
- The YIELD function in Excel calculates the yield on a security that pays periodic interest. It is commonly used to calculate the yield on bonds.
- To use the YIELD function, you need to provide the settlement date, maturity date, annual coupon rate, issue price, and redemption value of the security. The function will then calculate the yield.
- The arguments of the YIELD function are settlement, maturity, rate, pr, redemption, frequency, [basis]. Settlement is the date on which the security is purchased. Maturity is the date on which the security matures. Rate is the annual coupon rate. Pr is the issue price of the security. Redemption is the redemption value of the security. Frequency is the number of coupon payments per year. Basis is an optional argument that specifies the day count basis to use.
- The YIELD function returns the yield on a security as a percentage.
- Yes, the YIELD function can be used for different types of securities, such as bonds, treasury bills, and other fixed-income securities.