Join Curt Frye for an in-depth discussion in this video MDURATION: Calculating the duration of a security using the modified Macauley method, part of Excel 2010: Financial Functions in Depth.
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In the previous movie, I showed you how to evaluate a bond by using the DURATION function.…Another way to evaluate a bond is to use the Modified Duration or…MDURATION function.…The MDURATION function is more conservative than the straight DURATION…calculation because it is less sensitive to changes in yield.…To use the MDURATION function, you need to know the exact same information that…you do for the DURATION function.…So, you start with the settlement date and that is the date that you take…control of the investment.…Then you have the maturity date and that is the date that the investment comes…to an end and you're paid all proceeds due to you.…
Next is the coupon interest argument and that value represents the amount of…interest you get per coupon.…Then you have yield, which is the annual percentage yield for the investment,…the amount that increases per year, then the frequency and this is the number of…coupons that you receive per year.…That value can either be 1 for annual coupons, 2 for semiannual, or 4 for quarterly.…
- Analyzing loans, payments, and interest
- Discovering the interest rate of an annuity
- Determining depreciation using the straight line, declining balance, double-declining balance, and other methods
- Calculating the future value of an investment with variable returns
- Finding the discount rate of a security
- Converting between fractional prices and decimal prices
- Determining the yield of securities that pay interest periodically
Skill Level Intermediate
Managing and Analyzing Data in Excel 2010with Dennis Taylor1h 32m Appropriate for all
Excel 2010: Data Validation in Depthwith Dennis Taylor59m 45s Intermediate
1. Analyzing Loans, Payments, and Interest
2. Calculating Depreciation
3. Determining Values and Rates of Return
4. Calculating Bond Coupon Dates and Security Durations
5. Calculating Security Prices and Yields
6. Calculating Prices and Yields of Securities with Odd Periods
Additional resources1m 5s
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