PRICEDISC

PRICEDISC

Returns the price per $100 face value of a discounted security.

If this function is not available, run the Setup program to install the Analysis ToolPak. After you install the Analysis ToolPak, you must enable it by using the Add-Ins command on the Tools menu.

Syntax

PRICEDISC(settlement,maturity,discount,redemption,basis)

Settlement   is the security's settlement date. The security settlement date is the date after the issue date when the security is traded to the buyer.

Maturity   is the security's maturity date. The maturity date is the date when the security expires.

Discount   is the security's discount rate.

Redemption   is the security's redemption value per $100 face value.

Basis   is the type of day count basis to use.

Basis

Day count basis

0 or omitted

US (NASD) 30/360

1

Actual/actual

2

Actual/360

3

Actual/365

4

European 30/360


Remarks

  • The settlement date is the date a buyer purchases a coupon, such as a bond. The maturity date is the date when a coupon expires. For example, suppose a 30-year bond is issued on January 1, 1996, and is purchased by a buyer six months later. The issue date would be January 1, 1996, the settlement date would be July 1, 1996, and the maturity date would be January 1, 2026, which is 30 years after the January 1, 1996, issue date.
  • Settlement, maturity, and basis are truncated to integers.
  • If any argument is nonnumeric, PRICEDISC returns the #VALUE! error value.
  • If settlement or maturity is not a valid date, PRICEDISC returns the #NUM! error value.
  • If discount £ 0 or if redemption £ 0, PRICEDISC returns the #NUM! error value.
  • If basis < 0 or if basis > 4, PRICEDISC returns the #NUM! error value.
  • If settlement ³ maturity, PRICEDISC returns the #NUM! error value.
  • PRICEDISC is calculated as follows:

    Where:

    B = number of days in year, depending on year basis.

    DSM = number of days from settlement to maturity.

Example

A bond has the following terms:

February 15, 1993, settlement date
March 1, 1993, maturity date
5.25 percent discount rate
$100 redemption value
Actual/360 basis

The bond price (in the 1900 date system) is:

PRICEDISC("2/15/93","3/1/93",0.0525,100,2) equals 99.79583