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 Rate

    Coupon rate is the yield paid by a fixed income security, which ...
  2. Average Price

    The average price is sometimes used in determining a bond's yield ...
  3. Coupon Bond

    A coupon bond is a debt obligation with coupons attached that ...
  4. Discount Yield

    Discount yield is a measure of a bond's percentage return, frequently ...
  5. Current Coupon Bond

    A bond with a coupon rate that is within 0.5\% of the current ...
  6. Effective Yield

    The effective yield is the yield of a bond which has its coupons ...
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