Constant Yield Method

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Dictionary Says

Definition of 'Constant Yield Method'

One of two ways of calculating the accrued discount of bonds that trade in the secondary market. The constant yield method is an alternative to the ratable accrual method, and although it usually results in a lesser accrual of discount than the latter method, it is also requires more complex calculations.
Investopedia Says

Investopedia explains 'Constant Yield Method'

The constant yield amount is calculated by multiplying the adjusted basis by the yield at issuance and then subtracting the coupon interest. This method is also known as the effective or scientific method of amortization. The decision to use the constant yield method is irreversible, and is similar to the method the IRS prescribes to computer taxable original issue discount as outlined in IRS Publication 1212.
Search results for

'Constant Yield Method'

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    ... If your bond was purchased after September 27, 1985 then you will probably
    use the constant yield method to amortize your premium. ...

  • Advanced Bond Concepts: Yield and Bond Price | Investopedia

    http://www.investopedia.com/university/advancedbond/advancedbond3.asp
    ... cash flows (coupons payments) at a constant interest rate ... The yield to maturity,
    however, is an interest rate ... Such a method of valuation is complicated and can ...

  • The Risks Of Mortgage-Backed Securities

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    ... First-Time Homebuyers.). The FHA experience method was clearly ... over the standard
    mortgage yield, since it ... The Scenes Of Your Mortgage.) Constant Prepayment Rate ...

  • The Equity-Risk Premium: More Risk For Higher Returns

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    ... There is vigorous debate among experts about the method employed to calculate the ...
    at 5% per year and insist on a constant dividend yield, the stock ...

  • Choose Your Own Asset Allocation Adventure

    http://www.investopedia.com/articles/stocks/07/allocate_assets.asp
    ... A more precise method relies on using long-term forecasts ... at the shorter end of the
    yield curve can ... 3. Constant Weighted Allocation A comparison of the payoff ...

  • Advanced Bond Concepts: Duration | Investopedia

    http://www.investopedia.com/university/advancedbond/advancedbond5.asp
    ... In essence, key-rate duration, while holding the yield for all other maturities
    constant, allows the ... The key-rate method is most often used for portfolios ...

  • CFA Level 1 Study Guide - Assets - Depreciation | Investopedia

    http://www.investopedia.com/exam-guide/cfa-level-1/assets/depreciation.asp
    ... Time-Weighted Return; 2.8 Calculating Yield; 2.9 Statistical Concepts And Market ...
    Flow Statement Basics; 6.21 Cash Flow Computations - Indirect Method; 6.22 Cash ...

  • 3 Alternative Budgeting Styles: Which One Suits You?

    http://www.investopedia.com/articles/pf/09/alternative-budgeting-styles.asp
    ... of this method is simply that it doesn't require constant attention, and is ... Don't
    get discouraged if the first method you try doesn't yield the results you ...

  • Make A Risk-Based Mortgage Decision

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    ... constant or increases, home equity can remain constant or might ... History has proved
    that while no method of forecasting ... reflected in the shape of the yield curve ...

  • CFA Level 1 Study Guide - Liabilities - Total Interest Cost ...

    http://www.investopedia.com/exam-guide/cfa-level-1/liabilities/total-interest-cost-componenets.asp
    ... Time-Weighted Return; 2.8 Calculating Yield; 2.9 Statistical Concepts And Market ...
    Flow Statement Basics; 6.21 Cash Flow Computations - Indirect Method; 6.22 Cash ...

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