Documentation/How Tos/Calc: DISC function

DISC

Returns the discount rate of a security.

This function is only available if the Analysis AddIn is installed.

Syntax:

DISC(settlementdate; maturitydate; price; redemptionvalue; basis)

settlementdate: the settlement (purchase) date of the security.

maturitydate: the maturity (redemption) date of the security.

price: the price of the security.

redemptionvalue: the redemption value of the security.

basis: is the calendar system to use. Defaults to 0 if omitted.

0 - US method (NASD), 12 months of 30 days each

1 - Actual number of days in months, actual number of days in year

2 - Actual number of days in month, year has 360 days

3 - Actual number of days in month, year has 365 days

4 - European method, 12 months of 30 days each

DISC calculates the discount rate using this formula:

(redemptionvalue - price) / (redemptionvalue * YEARFRAC(settlementdate; maturitydate; basis))

Example:

DISC("2007-12-21"; "2008-02-15"; 98.9; 100; 1)

returns approximately 0.072, a discount rate of around 7.2%.

Issues:

• Calc follows Excel's apparent use of YEARFRAC in calculating DISC. Both Excel and Calc calculate YEARFRAC incorrectly in certain circumstances, and these (small) errors are propagated to DISC.