Need to make Beta Probability calculations? Microsoft Excel supplies two useful statistical functions for making just these sorts of calculations, BETADIST and BETAINV.
Microsoft Excel supplies two useful statistical functions for making beta probability calculations, BETADIST and BETAINV. Perhaps surprisingly, neither function is difficult to use as long as understand the inputs that supply data to the function.
Understanding the beta probability density function, BETADIST
The BETADIST function returns the cumulative beta probability density function.
Statisticians often use the cumulative beta probability density function to study variation across samples, such as when comparing two groups of people performing the same task to see whether they have the same success rate.
The BETADIST function uses the following syntax:
=BETADIST (x, alpha, beta, A, B)
where x is a value between two optional bounds A and B, and alpha and beta are the two
positive parameters.
An Example of the BETADIST Function
For example, if x equals 2, alpha equals 85, beta equals 90, A equals 1, and B equals 3, you would enter the function as follows:
=BETADIST (2, 85, 90, 1, 3)
The formula returns the value 0.647616.
Note that the uniform probability distribution is a special case of the beta probability distribution where alpha=beta=1.
Using the inverse beta probability density function, BETAINV
The BETAINV function returns the inverse of the cumulative beta probability density function. That is, you use the BETADIST function if you know x and want to find the probability, and you use the BETAINV function if you know the probability and want to find x.
The BETAINV function uses the following syntax:
=BETAINV (probability, alpha, beta, A, B)
where probability is a value between two optional bounds A and B, and alpha and beta are the two positive parameters.
An Example of the BETAINV Function
For example, if the probability equals 0.647616., alpha equals 85, beta equals 90, A equals 1, and B equals 3, you would enter the function as follows:
The formula returns the value 2.
Mastering Accrued Interest Calculations with Microsoft Excel
Microsoft Excel is not just a spreadsheet program; it's a powerful tool for financial calculations, including the computation of accrued interest for various securities. Excel's built-in functions, ACCRINT and ACCRINTM, are specifically designed to simplify the process of calculating accrued interest for securities that pay periodic interest and those that pay at maturity, respectively. This article delves into the nuances of these functions, providing a detailed guide on how to use them effectively, along with common pitfalls to avoid.
Using the Bond Duration Add-in Functions
Making bond duration calculations? Microsoft Excel can help. Excel provides two functions that help you with bond duration calculations.
Using Excel's Xirr and Xnpv Add-in Functions
Making internal rate of return or net present value calculations with Microsoft Excel? Make sure you aren't unnecessarily limiting your options. In addition to the well-know IRR and NPV financial functions, Microsoft Excel also supplies two powerful add-in functions, XIRR and XNPV, that can expand your analytical possibilities.
