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.
Formula
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BREAKING DOWN 'Coupon Equivalent Yield  CEY'
For example, the CEY calculation allows bond investors to compare the return on a 180day Treasury bill to a oneyear coupon paying bond, to evaluate which instrument will give the investor a higher return.
RELATED TERMS

Coupon
The annual interest rate paid on a bond, expressed as a percentage ... 
Current Coupon Bond
A bond with a coupon rate that is within 0.5\% of the current ... 
Discount Bond
A bond that is issued for less than its par (or face) value, ... 
Bond
A debt investment in which an investor loans money to an entity ... 
Current Yield
Annual income (interest or dividends) divided by the current ... 
Realized Yield
The actual amount of return earned on a security investment over ...
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RELATED FAQS

How do I calculate yield to maturity of a zero coupon bond?
Find out how to calculate the yield to maturity for a zero coupon bond, and see why this calculation is more simple than ... Read Answer >> 
What is the difference between yield to maturity and the coupon rate?
A bond's coupon rate is the actual amount of interest income earned on the bond each year based on its face value. The yield ... Read Answer >> 
What is the relationship between current yield and yield to maturity (YTM)?
Learn about the relationship between a bond's current yield and its yield to maturity, including how the market price of ... Read Answer >> 
How can I use the holding period return yield to determine whether or not I should ...
Find out how to use the holding period return yield formula to determine whether it is a good time to sell your bond based ... Read Answer >> 
How do I use the holding period return yield to evaluate my bond portfolio?
Find out how to use the holding period return yield formula to evaluate the performance of bonds in your portfolio, and view ... Read Answer >>