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cdyield

Yield on certificate of deposit (CD)

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Syntax

Yield = cdyield(Price,CouponRate,Settle,Maturity,IssueDate)
Yield = cdyield(___,Basis)

Description

Yield = cdyield(Price,CouponRate,Settle,Maturity,IssueDate) computes the yield to maturity of a certificate of deposit given its clean price.

cdyield assumes that the certificates of deposit pay interest at maturity. Because of the simple interest treatment of these securities, this function is best used for short-term maturities (less than 1 year). The default simple interest calculation uses the Basis for the actual/360 convention (2).

example

Yield = cdyield(___,Basis) adds an optional argument for Basis.

Examples

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Open Live Script

This example shows how to compute the yield on the certificate of deposit (CD), given a CD with the following characteristics.

Price      = 101.125;
CouponRate = 0.05;
Settle     = '02-Jan-02';
Maturity   = '31-Mar-02';
IssueDate = '1-Oct-01';

Yield = cdyield(Price, CouponRate, Settle, Maturity, IssueDate)
Yield = 
0.0039
Open Live Script

This example shows how to use datetime inputs to compute the yield on the certificate of deposit (CD), given a CD with the following characteristics. 

Price      = 101.125;
CouponRate = 0.05;
Settle     = datetime('02-Jan-02','Locale','en_US');
Maturity   = datetime('31-Mar-02','Locale','en_US');
IssueDate = datetime('1-Oct-01','Locale','en_US');

Yield = cdyield(Price, CouponRate, Settle, Maturity, IssueDate)
Yield = 
0.0039

Input Arguments

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Clean price of the certificate of deposit per $100 face, specified as a numeric value using a scalar or a NCDS-by-1 or 1-by-NCDS vector.

Data Types: double

Coupon annual interest rate, specified as decimal using a scalar or a NCDS-by-1 or 1-by-NCDS vector.

Data Types: double

Settlement date of the certificate of deposit, specified as a scalar or a NCDS-by-1 or 1-by-NCDS vector using a datetime array, string array, or date character vectors. The Settle date must be before the Maturity date.

To support existing code, cdyield also accepts serial date numbers as inputs, but they are not recommended.

Data Types: char | string | datetime

Maturity date of the certificate of deposit, specified as a scalar or a NCDS-by-1 or 1-by-NCDS vector using a datetime array, string array, or date character vectors.

To support existing code, cdyield also accepts serial date numbers as inputs, but they are not recommended.

Data Types: char | string | datetime

Issue date for the certificate of deposit, specified as a scalar or a NCDS-by-1 or 1-by-NCDS vector using a datetime array, string array, or date character vectors.

To support existing code, cdyield also accepts serial date numbers as inputs, but they are not recommended.

Data Types: string | char | datetime

(Optional) Day-count basis for the certificate of deposit, specified as a scalar or a NINST-by-1 vector. Values are:

  • 0 = actual/actual

  • 1 = 30/360 (SIA)

  • 2 = actual/360

  • 3 = actual/365

  • 4 = 30/360 (PSA)

  • 5 = 30/360 (ISDA)

  • 6 = 30/360 (European)

  • 7 = actual/365 (Japanese)

  • 8 = actual/actual (ICMA)

  • 9 = actual/360 (ICMA)

  • 10 = actual/365 (ICMA)

  • 11 = 30/360E (ICMA)

  • 12 = actual/365 (ISDA)

  • 13 = BUS/252

For more information, see Basis.

Data Types: double

Output Arguments

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Simple yield to maturity of the certificate of deposit, returned as a NCDS-by-1 or 1-by-NCDS vector.

Version History

Introduced before R2006a

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See Also

| | | (Financial Instruments Toolbox) | |

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