ODDFYIELD function: Description, Usage, Syntax, Examples and Explanation

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What is ODDFYIELD function in Excel?

ODDFYIELD function is one of the Financial functions in Microsoft Excel that returns the yield of a security that has an odd (short or long) first period.

Syntax of ODDFYIELD function

ODDFYIELD(settlement, maturity, issue, first_coupon, rate, pr, redemption, frequency, [basis])

The ODDFYIELD function syntax has the following arguments:

  • Settlement: 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: The security’s maturity date. The maturity date is the date when the security expires.
  • Issue: The security’s issue date.
  • First_coupon: The security’s first coupon date.
  • Rate: The security’s interest rate.
  • Pr: The security’s price.
  • Redemption: The security’s redemption value per $100 face value.
  • Frequency: The number of coupon payments per year. For annual payments, frequency = 1; for semiannual, frequency = 2; for quarterly, frequency = 4.
  • Basis (Optional): The type of day count basis to use.

Note: Problems can occur if dates are entered as text. Therefore, all dates should be entered by using the DATE function, or formatted as date under format cell to avoid errors.

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

ODDFYIELD formula explanation

  • Microsoft Excel stores dates as sequential serial numbers so they can be used in calculations. By default, January 1, 1900 is serial number 1, and January 1, 2008 is serial number 39448 because it is 39,448 days after January 1, 1900.
  • 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, 2008, and is purchased by a buyer six months later. The issue date would be January 1, 2008, the settlement date would be July 1, 2008, and the maturity date would be January 1, 2038, which is 30 years after the January 1, 2008, issue date.
  • Settlement, maturity, issue, first_coupon, and basis are truncated to integers.
  • If settlement, maturity, issue, or first_coupon is not a valid date, ODDFYIELD returns the #VALUE! error value.
  • If rate < 0 or if pr ≤ 0, ODDFYIELD returns the #NUM! error value.
  • If basis < 0 or if basis > 4, ODDFYIELD returns the #NUM! error value.
  • The following date condition must be satisfied; otherwise, ODDFYIELD returns the #NUM! error value:maturity > first_coupon > settlement > issue
  • Excel uses an iterative technique to calculate ODDFYIELD. This function uses the Newton method based on the formula used for the function ODDFPRICE. The yield is changed through 100 iterations until the estimated price with the given yield is close to the price. See ODDFPRICE for the formula that ODDFYIELD uses.

Example of ODDFYIELD function

Steps to follow:

1. Open a new Excel worksheet.

2. Copy data in the following table below and paste it in cell A1

Note: For formulas to show results, select them, press F2 key on your keyboard and then press Enter.

You can adjust the column widths to see all the data, if need be.

Data Argument description
November 11, 2008 Settlement date
March 1, 2021 Maturity date
October 15, 2008 Issue date
March 1, 2009 First coupon date
5.75% Percent coupon
84.50 Price
100 Redemptive value
2 Frequency is semiannual
0 30/360 basis
Formula Description Result
=ODDFYIELD(A2, A3, A4, A5, A6, A7, A8, A9, A10) The yield of a security that has an odd (short or long) first period, for the bond using the terms in cells A2:A10 as function arguments. Result is (0.0772, or 7.72%). 7.72%

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