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Chapter 10. Financial Functions > Excel in Practice

Excel in Practice

Notice the two examples of the COUPDAYS function in Figure 10.25. The first example uses cell referencing and the second hard codes the numbers in the formula. Whenever possible, use cell referencing with formulas so that your models or formulas remain dynamic. If you hard code numbers within formulas, you run the risk of error every time you want to update the numbers within the formula. The COUPDAYS function is found only if the Analysis ToolPak is installed and turned on by choosing Tools, Add-Ins. In Figure 10.26, you’ll see that the bond settlement date (the date a buyer purchases a coupon such as a bond) is 5/15/1999, and the maturity date (the date the bond expires) is 7/15/2000. The frequency is semianual and the basis is Actual/actual. The number of days between the coupon day and the settlement is 181. By using cell referencing instead of applying the dates in the formula, your formula becomes more flexible.

Figure 10.25. Use cell referencing whenever possible instead of hard coding numbers in formulas.



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