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Chapter 19. Working with Bonds > The ODDFYIELD() and ODDLYIELD() Functions

The ODDFYIELD() and ODDLYIELD() Functions

Some bonds have a first period that is odd, meaning that it's either shorter or longer than the standard coupon period. Consider a bond that pays semiannual coupon interest, which therefore has 6-month coupon periods. For example, a bond issued on January 15, 2001, would pay interest on July 15, 2001; January 15, 2002; and so on. However, an odd first period is one that's shorter or longer than 6 months. For example, suppose that you're considering purchasing a bond issued on January 15, 2001, and you see that the next interest payment occurs on April 15, 2004. Based on the issue date, you would expect the payment to have come on July 15, 2004, so this bond has an odd first coupon. (Here, “first” means the first coupon you receive.)

Similarly, some bonds have an odd last coupon period. For example, suppose that you're looking at a bond that pays semiannual interest and matures on January 15, 2011, and you see that it last paid interest on August 15, 2004. Based on the maturity date, you would have expected the payment to occur on July 15, 2004, so this bond has an odd last coupon. (Here, “last” means the last coupon that was paid.)


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