Coupon Equivalent Yield - CEY


DEFINITION of 'Coupon Equivalent Yield - CEY'

A method of calculation used to calculate the yield on bonds with maturities of less than one year and which normally sell at a discount and do not pay coupons.


Coupon Equivalent Yield (CEY)

BREAKING DOWN 'Coupon Equivalent Yield - CEY'

For example, the CEY calculation allows bond investors to compare the return on a 180-day Treasury bill to a one-year coupon paying bond, to evaluate which instrument will give the investor a higher return.

  1. Coupon

    The annual interest rate paid on a bond, expressed as a percentage ...
  2. Interest

    The charge for the privilege of borrowing money, typically expressed ...
  3. Discount Bond

    A bond that is issued for less than its par (or face) value, ...
  4. Bond

    A debt investment in which an investor loans money to an entity ...
  5. Coupon Bond

    A debt obligation with coupons attached that represent semiannual ...
  6. Yield

    The income return on an investment. This refers to the interest ...
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