Hi,

Can someone explain why in very easy samples XIRR gives a slightly
different (and wrong) result than YIELD?

Here is one sample:
Bond Face value 100,000. Issue march, 4, 2005. Maturity march, 4, 2006.
Coupon 5%; basis 3 (365/365); Settlement June 1st 2005, price 101.

This gives a yield of 3.5976969%

Now if you try to use XIRR, with 2 cashflows as:

June 1st 2005- -102,219.18 (-(101,000+accrued cpn as of June 1st))
March 4 2006 - 105,000.00

This gives a xirr of 3.6133815%. This is wrong and if you try to check
it by computing how you get at maturity with such a rate you get
(102,219.18+102,219.18*3.6133815%*276/365)=105,012.12

In fact xirr gives the same result as yield only when the settlement
date is equal to the issue or a coupon date (i.e. when the accrued
coupon is 0 at settlement date).

Thanks in advance