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

The PRICEDISC function calculates the price per $100 face value of a discounted security. The function arguments are:

settlement

is the settlement date of the security, expressed as a date code

maturity

is the maturity date of the security, expressed as a date code

discount

is the discount rate of the security

redemption

is the redemption value of the security per $100 face value

basis

is the type of day count basis used, where basis is one of the following:

Basis

Day count basis

0

US 30/360

1

Actual/actual

2

Actual/360

3

Actual/365

4 or omitted

European 30/360

The formula used is

redemption - (discount * redemption * DSM/B)

in which B is the number of days in a year according to the year basis used and DSM is the number of days from settlement to maturity.

For example, if a bond has settlement date 15th July, 1997, maturity date 31st October, 1997, discount rate of 4.9%, and redemption value $100, with a year basis of actual/365, then the formula

PRICEDISC(35625, 35733, 0.049, 100, 3)

returns a price of $98.55.

See also:

Other financial functions