If you are learning or starting in the stock market it is necessary that you know some advantages of Excel that will surely be of great help; In this way you can get the results of the calculations correctly and easily, such as using the DURATION.MODIF function.
In this sense, the DURATION.MODIF function in Excel is basically responsible for returning the annual duration ; or also called Macauley, of a stock market value, which will be composed of a series of data or syntax to be able to get the information you are looking for.
When we refer to the syntax to use an Excel function, it indicates the order or arrangement and arguments; that is, they are data that we must enter correctly so that we can find the value, since otherwise it will give an error, in this case if you wish you can as a complement consult the Microsoft support help .
What is the correct syntax for the DURATION.MODIF function?
In this case it is necessary to use the correct syntax in this way, the DURACION.MODIF function will be able to return the nominal value ; then the arguments and correct order should be (settlement, expiration, coupon, yield, frequency [base]).
Likewise, to use formulas in spreadsheets it is necessary to have a basic knowledge. In this way you will be able to load each of the data and thus use the correct and complete syntax as follows; DURACION.MODIF (settlement, maturity, coupon, yield, frequency [base]).
Settlement
Basically we refer to the settlement date of the market value ; In other words, it is the date after its issuance on which the buyer acquires the cost of the share or the economic title.
Expiration
In this case it represents the expiration date of the stock; or also the exact time in which it will expire, either the economic title or share acquired by the buyer.
Coupon
The coupon is made up of a numerical data that will be greater than or equal to 0 ; on the other hand, it will indicate what is the annual nominal interest rate of the stock market value; however, if a negative number is entered the function returns #NUM! Or if it is not numeric, it will show #VALUE! Error.
Performance
Regarding performance, in principle it should only be a numerical data , also greater than or equal to 0; it also shows the annual profit rate of the stock market value. In case of being a negative number, it will show the code #NUM !, and if it does not have numbers, then it will give #VALUE! Error.
Frequency
It will always be necessary to know the importance of using spreadsheets , since with them we can get the calculations quickly; as in this case where the frequency represents how many payments are made per year.
For example, if it is 1 it determines that it is once a year , that is, the payment is made annually; but if it is 2 then we speak semester or every 6 months and finally 4 which means quarterly, equally if the frequency is not calculated in 1, 2 or 4 it will give an error or if it is not numerical it will happen in the same way.
Base
The base will include an integer numerical value that this time will be greater than or equal to 0 and also less than or equal to 4; on the other hand, it will only indicate how the days will be counted and thus calculate the result .
What should you know about the DURATION.MODIF function?
Not everything in Excel is so complex, you can easily use other functions to calculate the average or any other data you need; but in the specific issue of DURACION.MODIF there are values that you must take into account, since otherwise the information will not be correct.
All values will be mandatory, settlement, maturity, coupon, yield and frequency, less the basis ; In this sense, it will not be necessary to calculate it, you only have to locate 0 and enter the numbers 1, 2, 3 or 4 taking into account the calculation according to the days established by each system.
