Difference between =YIELD and =XIRR

R

realtylerdurdon

New Member
Joined
Jan 20, 2004
Messages
44
Hi all,

this may be a math question, but I hope someone can help: When I use =YIELD I get a different result compared to =XIRR used on the modeled cashflows. When there are more payments per year, IRR goes up and Yield goes down.

Is this, because Yield assumes a zero return (i.e. no re-investing) of the intrayear payments?

Thanks!
 

Excel Facts

Create a chart in one keystroke
Select the data and press Alt+F1 to insert a default chart. You can change the default chart to any chart type
Sort by date Sort by votes
i am having the same issue with XIRR and YIELD.

YIELD seems to take coupon payment frequency into account, even with a zero coupon bond. In theory, XIRR and YIELDMAT should be pretty close, save for the 365 v 360 day convention. in my below example, i get diff YIELD results depending on whether i choose 2 (semi) or 1 (annual) coupon periods, even thouugh the example is with a zero coupon bond!

PLEASE HELP!!!

<table x:str="" style="border-collapse: collapse; width: 169pt;" border="0" cellpadding="0" cellspacing="0" width="225"><col style="width: 119pt;" width="159"> <col style="width: 50pt;" width="66"> <tbody><tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt; width: 119pt;" height="17" width="159">Price</td> <td style="width: 50pt;" x:num="80" align="right" width="66">80.0 </td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Par</td> <td x:num="100" align="right">100.0 </td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Settlement</td> <td class="xl175" x:num="38353" align="right">1-Jan-05</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Maturity</td> <td class="xl175" x:num="40178" x:fmla="=+B3+365*5" align="right">31-Dec-09</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Coupon</td> <td class="xl174" x:num="0" align="right">0.0%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">
</td> <td>
</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">YIELD - semi annual</td> <td class="xl177" x:num="4.5155732580295288E-2" x:fmla="=+YIELD(B3,B4,B5,B1,B2,2)" align="right">4.516%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">YIELD - annual</td> <td class="xl177" x:num="4.5665492620166233E-2" x:fmla="=+YIELD(B3,B4,B5,B1,B2,1)" align="right">4.567%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">XIRR</td> <td class="xl177" x:num="4.5639553666114815E-2" x:fmla="=+XIRR(B11:B21,A11:A21)" align="right">4.564%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">
</td> <td>
</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl176" style="height: 12.75pt;" x:num="38353" x:fmla="=+B3" height="17">1-Jan-05</td> <td x:num="-80" x:fmla="=-B1" align="right">(80.0)</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl176" style="height: 12.75pt;" x:num="38533" x:fmla="=+A11+180" height="17">30-Jun-05</td> <td x:num="0" align="right">0.0 </td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl176" style="height: 12.75pt;" x:num="38717" x:fmla="=+A12+184" height="17">31-Dec-05</td> <td x:num="0" align="right">0.0 </td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl176" style="height: 12.75pt;" x:num="38898" x:fmla="=+A13+181" height="17">30-Jun-06</td> <td x:num="0" align="right">0.0 </td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl176" style="height: 12.75pt;" x:num="39082" x:fmla="=+A14+184" height="17">31-Dec-06</td> <td x:num="0" align="right">0.0 </td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl176" style="height: 12.75pt;" x:num="39263" x:fmla="=+A15+181" height="17">30-Jun-07</td> <td x:num="0" align="right">0.0 </td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl176" style="height: 12.75pt;" x:num="39447" x:fmla="=+A16+184" height="17">31-Dec-07</td> <td x:num="0" align="right">0.0 </td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl176" style="height: 12.75pt;" x:num="39629" x:fmla="=+A17+182" height="17">30-Jun-08</td> <td x:num="0" align="right">0.0 </td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl176" style="height: 12.75pt;" x:num="39813" x:fmla="=+A18+184" height="17">31-Dec-08</td> <td x:num="0" align="right">0.0 </td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl176" style="height: 12.75pt;" x:num="39994" x:fmla="=+A19+181" height="17">30-Jun-09</td> <td x:num="0" align="right">0.0 </td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl176" style="height: 12.75pt;" x:num="40178" x:fmla="=+A20+184" height="17">31-Dec-09</td> <td x:num="100" x:fmla="=+B2" align="right">100.0 </td> </tr> </tbody></table>
 
Upvote 0
You must log in or register to reply here.

Similar threads

R
  • Solved
maths formula help - percentage variance
Replies
2
Views
202
realsongs
R
S
  • Question
Automatic accrual calculations by day with accrual rate?
Replies
0
Views
217
Sunshine8790
S
J
  • Question
Excel Function Help Needed, for an IF FALSE "DO NOTHING" POSSIBILITY
2 3 4
Replies
30
Views
2K
JKM00
J
J
  • Question
Is there a way to have several small spreadsheets open on a screen at the same time in excel?
Replies
1
Views
129
Logit
Logit
J
  • Question
Automatically setting filters based upon user selection criteria
Replies
1
Views
138
John_w
J

Forum statistics

Threads
1,214,516
Messages
6,119,978
Members
448,934
Latest member
audette89

Share this page

We've detected that you are using an adblocker.

We have a great community of people providing Excel help here, but the hosting costs are enormous. You can help keep this site running by allowing ads on MrExcel.com.
Allow Ads at MrExcel

Which adblocker are you using?

Disable AdBlock

Follow these easy steps to disable AdBlock

1)Click on the icon in the browser’s toolbar.
2)Click on the icon in the browser’s toolbar.
2)Click on the "Pause on this site" option.
Go back

Disable AdBlock Plus

Follow these easy steps to disable AdBlock Plus

1)Click on the icon in the browser’s toolbar.
2)Click on the toggle to disable it for "mrexcel.com".
Go back

Disable uBlock Origin

Follow these easy steps to disable uBlock Origin

1)Click on the icon in the browser’s toolbar.
2)Click on the "Power" button.
3)Click on the "Refresh" button.
Go back

Disable uBlock

Follow these easy steps to disable uBlock

1)Click on the icon in the browser’s toolbar.
2)Click on the "Power" button.
3)Click on the "Refresh" button.
Go back
Back
Top