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. Discount Bond

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

    The interest rate stated on a bond when it's issued. The coupon ...
  3. Bond

    A debt investment in which an investor loans money to an entity ...
  4. Interest

    1. The charge for the privilege of borrowing money, typically ...
  5. Yield

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

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