Day Count Basis in Excel

[RICH09]

Hi, could anyone please advise how the day count basis works in excel? I have an example and use PRICE() funtion. Strangely, I can't replicate by choosing day count basis=2 (act/360) and 3 (act/365) and when you look into act/360, the price even returns more than 100.

=PRICE("2012/12/22","2012/12/24",0,0.1,100,2,2)

ps. btw, i have checked HELP file and seems not matching. Thanks

 

[xenou]

In my help on PRICE it says:

Important Dates should be entered by using the DATE function, or as results of other formulas or functions. For example, use DATE(2008,5,23) for the 23rd day of May, 2008. Problems can occur if dates are entered as text.

So before going any further I would suggest you do not enter dates as text - then post again if you still have problems.

ξ

 

[RICH09]

In my help on PRICE it says:



So before going any further I would suggest you do not enter dates as text - then post again if you still have problems.

ξ

Thanks. It returns the same value when I changed to date value. I don't think it's text format to cause the problem.

 

[xenou]

Okay,

When you say you "can't replicate by choosing day count basis=2 (act/360) and 3 (act/365)" exactly what is it that you cannot replicate?

Also, why is the rate in this problem zero? That seems an unusual rate.

Note that it *is* possible to for a price to be more than 100 (i.e., bond is selling at a premium).

ξ