How to use the DOLLARFR function
What is the DOLLARFR function?
The DOLLARFR function converts a decimal number to its equivalent in fractional numbers, used in securities denominated in dollars. DOLLARFR is an abbreviation for dollar fraction.
It wont display the entire fraction in the cell, only the numerator. For example, decimal number 1.5 with a the denominator of 16 returns 1.08 which is to be read as 1 and 8/16
Why use fractional numbers instead of decimal numbers in securities denominated in dollars?
The use of fractional numbers instead of decimal numbers in securities denominated in dollars is a historical practice that dates back to the Spanish colonization of the Americas. By using fractions such as 1/8 or 1/16 of a dollar allowed market makers to earn more profits from the bid-ask spread.
The fractional system became obsolete and inefficient with the use of electronic trading and increased competition and was abandoned in 2001.
What is a fractional number?
A fractional number represents a part or portion of a whole number. It contains a fraction, which consists of:
numerator / denominator
Fraction | Desc |
Numerator | the top number in a fraction representing the number of parts. |
Denominator | the bottom number representing the total number of parts the whole was divided into. |
Some examples of fractional numbers:
1/3
3/5
4/11
645/1100
DOLLARFR function Syntax
DOLLARFR(decimal_dollar, fraction)
DOLLARFR function Arguments
decimal_dollar | Required. A decimal number, example 1.25. |
fraction | Required. An integer that represents the denominator of a fraction. The numerator is always 1. numerator/denominator |
What is the difference between a decimal number and an integer?
The main differences between decimal numbers and integers are:
Decimal Numbers
- Contain a decimal point and fractional part
- Can represent fractional or non-whole values
- Include parts of a whole number
- Digits can be after the decimal point
- Examples: 1.5, 3.1415, -2.8
Integers
- No decimal point or fractional part
- Whole numbers only, no decimals
- Includes negative whole numbers
- Examples: -3, 0, 5, 1000
DOLLARFR function example
The formula in cell D3 converts the decimal number 1.2 to a number read as 1 and 16/8.
Formula in cell D3:
The formula in cell D4 converts the decimal number 1.5 to a number read as 1 and 8/16.
DOLLARFR function not working
The DOLLARFR returns
- #NUM error value if fraction < 0 (zero).
- #DIV/0! error value if fraction = 0 (zero).
Functions in 'Financial' category
The DOLLARFR function function is one of 29 functions in the 'Financial' category.
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