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.
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