Dax Function: YIELDDISC

Category: Financial Functions

The YIELDDISC function in Power BI calculates the annual yield of a discounted security, such as a Treasury bill, that does not pay periodic interest but is issued at a discount and redeemed at face value.

Purpose

• To determine the annualized return (yield) for short-term securities sold at a discount.

• Assists investors in evaluating the profitability of discounted investments.

Type of Calculations

• Computes the yield for securities where interest is embedded in the discount price.

• Uses settlement date, maturity date, redemption value, and purchase price for its calculation.

Practical Use Cases

1. Treasury Bills Analysis: Calculate the yield on government-issued T-bills.

2. Discounted Securities Evaluation: Assess returns on zero-coupon bonds or similar securities.

3. Short-Term Investments: Compare the profitability of various short-term instruments.

Mathematical Principle

The YIELDDISC function calculates yield based on the following formula:

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Where:

• Redemption: Redemption value of the security.

• Price: Purchase price of the security.

• Basis Days: Number of days in a year (based on the basis parameter).

• Days to Maturity: Number of days from settlement to maturity.

Key Points

• This function assumes a discounted security with no periodic interest payments.

• Basis selection affects the day count and yield accuracy.

What Does It Return?

• Decimal Value: The calculated annualized yield of the discounted security as a decimal (e.g., 0.025 for 2.5%).

When Should We Use It?

1. Evaluate T-Bills: Use the function to analyze the annualized return of Treasury bills.

2. Short-Term Investment Decisions: Compare discounted securities across different issuers.

3. Cash Flow Management: Optimize returns on temporary surplus cash.

Examples

Basic Usage :

Calculate the yield for:

• Settlement date: 2023-01-01

• Maturity date: 2023-07-01

• Price: $97

• Redemption: $100

• US 30/360 basis

Result: 0.0628 (6.28%)

Column Usage

For a table of discounted securities:

Result: Adds annualized yields for each security.

Advanced Usage

Calculate inflation-adjusted yield:

Use an external inflation rate for comparison:

Result: Computes yield accounting for inflation.

Tips and Tricks

• Ensure all dates are valid and logically consistent.

• Use the correct day count basis to align with the investment’s conventions.

• Incorrect redemption or price values may lead to unrealistic yields.

• Settlement date must always precede the maturity date.

Performance Impact of YIELDDISC DAX Function:

• Computationally efficient for small to medium datasets.

• Filter large datasets before applying to avoid performance bottlenecks.

Related Functions You Might Need

Want to Learn More?
For more information, check out the official Microsoft documentation for YIELDDISC You can also experiment with this function in your Power BI reports to explore its capabilities.

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