XL2000: Basis Argument for Financial Functions (214050)

MORE INFORMATION

Basis is the type of day count basis as it relates to financial equations. The following is a list of Microsoft Excel financial functions that use a basis:

   ACCRINT()      COUPNUM()      ODDFPRICE()      PRICEDISC()
   ACCRINTM()     COUPPCD()      ODDFYIELD()      PRICEMAT()
   COUPDAYBS()    DISC()         ODDLPRICE()      RECEIVED()
   COUPDAYS()     DURATION()     ODDLYIELD()      YIELD()
   COUPDAYSNC()   MDURATION()    PRICE()          YIELDDISC()   
   COUPNCD()      
				

There are five types of basis in Microsoft Excel, including the European Basis 30/360.

The table below explains all five types of bases with examples for each type:

   Basis           Day count basis
   ------------------------------------

   0 or omitted    30/360
   1               Actual/Actual
   2               Actual/360
   3               Actual/365
   4               European Form 30/360
				

NOTE: Basis 4 (European Form 30/360) treats the end of February and the thirty-first of a month differently than the 30/360 basis used by the National Security Dealers (NASD) or Securities Industry Association (SIA).

Basis Types

• Basis 0 uses 30 days a month for a total of 360 days a year. The yields of agencies are calculated on this basis. These agencies include government-sponsored organizations that make up a range of federal banks and loan mortgage banks. This method uses 180 days.
• Basis 1 is used by treasuries. The actual number of days is counted. This method takes leap years into account so there could be 365 or 366 days.
• Basis 2 is similar to Basis 1, but only has 360 days per year.
• Basis 3 is similar to Basis 1, but always has 365 days per year.
• Basis 4 is the European method for starting and ending dates that occur on the 31st of the month. For example, if the starting or ending date is the 31st of a month, it then becomes equal to the thirtieth of the same month.