Coupon Equivalent Rate - CER
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Definition of 'Coupon Equivalent Rate - CER'A alternative calculation of coupon rate used to compare zero-coupon and coupon fixed-income securities.Formula: 
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Investopedia explains 'Coupon Equivalent Rate - CER'Because the quoted rate of bonds is calculated according to face value, this rate for bonds issued at a discount is inaccurate for comparing them to other coupon bonds. It is more accurate to use the CER because it uses the investor's initial investment as the basis. |
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