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

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  3. Bond

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  4. Discount

    The condition of the price of a bond that is lower than par. ...
  5. Time Value of Money - TVM

    The idea that money available at the present time is worth more ...
  6. At Par

    A term that refers to a bond, preferred stock or other debt obligation ...
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