Formula Generator - PRICE function
The PRICE function is used to calculate the price of securities paying periodic interest, such as bonds. It considers factors such as the settlement date, maturity date, coupon rate, yield, redemption value, frequency of coupon payments, and optional day count convention. The function returns the price at which the security should be traded in the market.
How to generate an PRICE formula using AI.
To obtain the PRICE formula, you can ask the AI chatbot the following question: "What is the formula for calculating the price of a financial instrument, given the required yield, settlement date, maturity date, coupon rate, and face value?"
PRICE formula syntax.
The PRICE function in Excel calculates the price per $100 face value of a security with a specified settlement date, maturity date, annual coupon rate, yield, and redemption value. The syntax for the PRICE function is: PRICE(settlement, maturity, rate, yield, redemption, frequency, [basis]) - settlement: The settlement date of the security. - maturity: The maturity date of the security. - rate: The annual coupon rate of the security. - yield: The annual yield of the security. - redemption: The redemption value of the security. - frequency: The number of coupon payments per year. - basis (optional): The day count basis to use for calculations. The function returns the price per $100 face value of the security. Note: The settlement and maturity dates should be valid Excel dates, and the rate, yield, and redemption values should be expressed as percentages. The frequency should be a whole number (1 for annual, 2 for semi-annual, etc.), and the basis should be a number representing the desired day count basis (0 for US (NASD) 30/360, 1 for actual/actual, etc.).
Calculating the price of a US Treasury Bond
This use case demonstrates how to calculate the price of a US Treasury Bond using the PRICE function. The function takes into account the settlement date, maturity date, coupon rate, yield, redemption value, frequency of coupon payments, and optional day count convention.
PRICE(settlement, maturity, rate, yield, redemption, frequency, [day_count_convention])
Estimating the fair value of a corporate bond
In this use case, we use the PRICE function to estimate the fair value of a corporate bond. By providing the settlement date, maturity date, coupon rate, yield, redemption value, frequency of coupon payments, and optional day count convention, the function calculates the price at which the bond should be traded in the market.
PRICE(settlement, maturity, rate, yield, redemption, frequency, [day_count_convention])
Valuing a fixed income portfolio
This use case showcases the use of the PRICE function to value a fixed income portfolio. By applying the function to each bond in the portfolio, using their respective settlement dates, maturity dates, coupon rates, yields, redemption values, frequencies of coupon payments, and optional day count conventions, we can determine the total value of the portfolio.