The settlement date is the date a buyer purchases a coupon, such as a bond. The maturity date is the date when a coupon expires. For example, suppose a 10-year bond is issued on January 1, 2014, and is purchased by a buyer seven months later. The issue date would be January 1, 2014, the settlement date would be August 1, 2014, and the maturity date would be January 1, 2024, 10 years after the January 1, 2014, issue date.

##### Using the YIELD function:

The arguments for the YIELD function are:

Argument | Required? | Description |
---|---|---|

settlement | Required | The security's settlement date. The security settlement date is the date after the issue date when the security is traded to the buyer. |

maturity | Required | The security's maturity date. The maturity date is the date when the security expires. |

rate | Required | The security's annual coupon rate. |

pr | Required | The security's price per $100 face value. |

redemption | Required | The security's redemption value per $100 face value. |

frequency | Required | The number of coupon payments per year. For annual payments, frequency = 1; for semiannual, frequency = 2; for quarterly, frequency = 4. |

basis | Optional | The type of day count basis to use. |

##### Quite A few more things:

• Excel stores dates as sequential serial numbers so they can be used in calculations. By default, January 1, 1900 is serial number 1, and January 1, 2014 is serial number 41640 because it is 41,640 days after January 1, 1900. |

• settlement, maturity, frequency and basis are truncated to integers. |

• If settlement or maturity is not a valid date, YIELD returns the #VALUE! error value. |

• If rate < 0, YIELD returns the #NUM! error value. |

• If pr ≤ 0 or if redemption ≤ 0, YIELD returns the #NUM! error value. |

• If frequency is any number other than 1, 2, or 4, YIELD returns the #NUM! error value. |

• If basis < 0 or if basis > 4, YIELD returns the #NUM! error value. |

• If settlement ≥ maturity, YIELD returns the #NUM! error value. |

• If there is more than one coupon period until redemption, YIELD is calculated through a
hundred iterations. The resolution uses the Newton method, based on the formula used for the function PRICE.
The yield is changed until the estimated price given the yield is close to price. |