Article Tags: Date, Coupon Rate

Article Tags: Date, Coupon Rate,, Accrued Interest, Pays Interest, Issue Date,, First Interest, Settlement

Date,, Date, Coupon, Coupon Rate,, Coupon MBT Sini, Rate, Annual Interest, Actual Number, Excel Returns

Excel provides two functions that let you make bond duration calculations: DURATION and MDURATION. Duration, a

weighted average measure of the present value of a bond’s cash flows, quantifies how a change in the bond yield

affects the bond price.

Understanding the Bond Duration Function Arguments

Both duration functions use the same set of six arguments: the settlement date, the maturity date, the coupon

rate, the yield, the coupon frequency, and the day count basis. The settlement date specifies the date the bond

is settled, or purchased. The maturity date specifies the date the bond matures, or expires. As with the other

add-in financial functions, you may enter the date arguments either as text strings enclosed in quotation marks

or as serial date values.

The coupon rate argument is the bond’s interest rate MBT Tembea and is used to calculate coupon payments. The yield

argument is the bond’s annual yield.

NOTE: Both duration functions assume that the bond’s face, or par, value equals $100. The frequency argument

gives the number of coupon payments made each year: you specify 1 to indicate an annual coupon, 2 to indicate a

semiannual coupon, and 4 to indicate a quarterly coupon.