discrate (Financial Toolbox)

Bank discount rate of a money market security

Syntax

DiscRate = discrate(Settle, Maturity, Face, Price, Basis)

Arguments

Settle
Enter as serial date number or date string. Settle must be earlier than or equal to Maturity.

Maturity
Enter as serial date number or date string.

Face
Redemption (par, face) value.

Price
Price of the security.

Basis
(Optional) Day-count basis: 0 = actual/actual (default), 1 = 30/360, 2 = actual/360, 3 = actual/365.

`Settle`	Enter as serial date number or date string. `Settle` must be earlier than or equal to `Maturity`.
`Maturity`	Enter as serial date number or date string.
`Face`	Redemption (par, face) value.
`Price`	Price of the security.
`Basis`	(Optional) Day-count basis: 0 = actual/actual (default), 1 = 30/360, 2 = actual/360, 3 = actual/365.

Description

DiscRate = discrate(Settle, Maturity, Face, Price, Basis) finds the bank discount rate of a security. The bank discount rate normalizes by the face value of the security (e.g., U. S. Treasury Bills) and understates the true yield earned by investors.

Examples

DiscRate = discrate('12-jan-2000', '25-jun-2000', 100, 97.74, 0)

returns

```
DiscRate =

    0.0501
```

a discount rate of 5.01%.

See Also

acrudisc, fvdisc, prdisc, ylddisc

References

Mayle, Standard Securities Calculation Methods, Volumes I-II, 3rd edition. Formula 1.

disc2zero effrr