ODDLPRICE
The ODDLPRICE function calculates the price per $100 face value of a security with an odd (irregular) first period.
Syntax
=ODDLPRICE(Settlement, Maturity, Issue, First_Coup, Rate, Yield, Redemption, Basis) Arguments
| Argument | Required | Description |
|---|---|---|
| Settlement | Yes | The security's settlement date. |
| Maturity | Yes | The security's maturity date. |
| Issue | Yes | The security's issue date. |
| First_Coup | Yes | The date of the security's first coupon payment. |
| Rate | Yes | The security's annual coupon rate. |
| Yield | Yes | The security's annual yield. |
| Redemption | Yes | The security's redemption value per $100 face value. |
| Basis | Yes | The day-count basis to use for calculation. |
About
When dealing with securities that have an irregular first period, such as bonds with unconventional coupon payment schedules, the ODDLPRICE function in Excel comes to the rescue. This function aids in determining the price per $100 face value of a security, ensuring accurate financial evaluations and investment decisions in scenarios where traditional pricing methods fall short due to the odd payment structures.
Examples
Suppose you have a bond with the following details: settlement date - 01/15/2022, maturity date - 01/15/2027, issue date - 08/15/2021, first coupon date - 01/15/2022, annual coupon rate - 5%, annual yield - 4%, redemption value per $100 face value - $105, and using the actual/actual day-count basis for calculation. To calculate the price per $100 face value of the bond on a given settlement date, the ODDLPRICE formula would be: =ODDLPRICE("01/15/2022", "01/15/2027", "08/15/2021", "01/15/2022", 0.05, 0.04, 105, 1)
Tips & notes
Ensure the accuracy of the dates entered in the function as Excel-compatible date values. Verify that the coupon payments align with the specified parameters to yield meaningful results. Customize the function's input values according to the specifics of the security under evaluation for precise calculations.
Common questions
What is the significance of the 'First_Coup' argument in the ODDLPRICE function?
The 'First_Coup' argument denotes the date of the first coupon payment for the security. It plays a crucial role in calculating the price per $100 face value, especially in cases where the initial payment period differs from the standard schedule.
How does the ODDLPRICE function handle securities with irregular payment structures?
The ODDLPRICE function is specifically designed to accommodate securities with irregular first periods, ensuring accurate pricing calculations even in scenarios where traditional methods may falter due to odd coupon payment schedules.
Can the ODDLPRICE function adapt to different day-count bases for calculation?
Yes, the 'Basis' argument in the ODDLPRICE function allows users to specify the day-count basis to be used in the pricing calculation. By adjusting this parameter, users can cater to various day-count conventions for precise valuation outcomes.