ODDLYIELD Excel Function

ODDLYIELD Function in Excel: Calculating Yield for Securities with Odd Periods

The ODDLYIELD function in Excel is a powerful tool for financial analysts and investors dealing with bonds and other fixed-income securities that have non-standard first or last periods. This function calculates the yield of a security with an odd (short or long) first period, providing accurate results for complex financial instruments.

Function Syntax

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

Key Parameters

• settlement: The security’s settlement date
• maturity: The security’s maturity date
• issue: The security’s issue date
• first_coupon: The security’s first coupon date
• rate: The security’s annual coupon rate
• pr: The security’s price per $100 face value
• redemption: The security’s redemption value per $100 face value
• frequency: Number of coupon payments per year (1, 2, or 4)
• basis: (Optional) The day count basis to use (0-4)

Practical Applications

The ODDLYIELD function is particularly useful for:

• Calculating yields for bonds with irregular payment schedules
• Analyzing complex bond structures
• Comparing different securities with non-standard periods
• Investment portfolio management
• Accurate financial analysis and decision-making

Example Usage

=ODDLYIELD("2023-01-01", "2025-01-01", "2022-12-01", "2023-06-01", 0.05, 95, 100, 2, 0)

This example calculates the yield of a security with a settlement date of January 1, 2023, maturity date of January 1, 2025, issue date of December 1, 2022, first coupon date of June 1, 2023, an annual coupon rate of 5%, price of $95 per $100 face value, redemption value of $100, semi-annual payments, and using the US (NASD) 30/360 day count basis.

Common Challenges

While using the ODDLYIELD function, users may encounter:

• Complexity in understanding all required parameters
• Confusion with date formats
• Difficulty in choosing the correct frequency and basis
• Interpreting results for securities with very irregular periods

Conclusion

The ODDLYIELD function is an essential tool for financial professionals dealing with non-standard securities. By providing accurate yield calculations for bonds with odd periods, it enables more precise financial analysis and informed investment decisions. While it may require some practice to master, its benefits in handling complex financial instruments make it a valuable addition to any analyst’s Excel toolkit.