What is the DISC Function?
The DISC function in Power BI is used to calculate the discount rate for a security that is sold at a discount to its face value. The discount rate is the rate at which the security is discounted to its present value.
The syntax for the DISC function is as follows:
DISC(settlement, maturity, pr, redemption, [basis])
- `settlement` is the security's settlement date.
- `maturity` is the security's maturity date.
- `pr` is the security's price per $100 face value.
- `redemption` is the security's redemption value per $100 face value.
- `basis` is an optional argument that specifies the day count basis to use. If omitted, it defaults to 0 (or US (NASD) 30/360).
How to Use the DISC Function in Power BI
To use the DISC function in Power BI, follow these steps:
1. Open Power BI Desktop and create a new report.
2. Add a table or create a new measure that contains the settlement, maturity, pr, and redemption values.
3. Create a new measure by clicking on New Measure under the Home tab.
4. In the formula bar, enter the DISC function with the appropriate arguments.
5. Press Enter to calculate the discount rate.
For example, suppose we have a table containing the following data:
| Settlement | Maturity | Price | Redemption |
| 01/01/2021 | 01/01/2022 | 98.50 | 100.00 |
To calculate the discount rate, we would create a new measure with the following formula:
Discount Rate = DISC(‘Table'[Settlement], ‘Table'[Maturity], ‘Table'[Price], ‘Table'[Redemption])
This will calculate the discount rate for the security based on the specified settlement, maturity, price, and redemption values.
Tips for Using the DISC Function
Here are some tips for using the DISC function effectively in Power BI:
- Be sure to specify the correct day count basis. The default basis is 0 (or US (NASD) 30/360), but other bases may be more appropriate depending on the security being analyzed.
- Make sure the settlement and maturity dates are entered in the correct format. The DISC function requires date values to be entered in the format "mm/dd/yyyy".
- Check your inputs carefully. Errors in the input values can lead to incorrect results.
In conclusion, the DISC function in Power BI is a powerful tool for calculating the discount rate for a security that is sold at a discount to its face value. By following the steps outlined in this article and using the tips provided, you can use the DISC function effectively in your financial models and investment analysis.