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
Next Up
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 Rate
The yield paid by a fixed income security. A fixed income security's ... 
Average Price
The average price is sometimes used in determining a bond's yield ... 
Coupon
The annual interest rate paid on a bond, expressed as a percentage ... 
Bond Valuation
Bond valuation is a technique for determining the theoretical ... 
Coupon Equivalent Rate  CER
A alternative calculation of coupon rate used to compare zerocoupon ... 
Coupon Bond
A debt obligation with coupons attached that represent semiannual ...
Related Articles

Investing
Comparing Yield To Maturity And The Coupon Rate
Investors base investing decisions and strategies on yield to maturity more so than coupon rates. 
Investing
Explaining the Coupon Rate
Coupon rate is the stated interest rate on a fixed income security. 
Investing
How Do I Calculate Yield To Maturity Of A Zero Coupon Bond?
Yield to maturity is a basic investing concept used by investors to compare bonds of different coupons and times until maturity. 
Investing
How Does A Bondâ€™s Coupon Interest Rate Affect Its Price?
All bonds come with a coupon interest rate, which is the fixed annual interest a bond pays. 
Investing
Understanding the Different Types of Bond Yields
Any investor, private or institutional, should be aware of the diverse types and calculations of bond yields before an actual investment. 
Investing
5 Basic Things To Know About Bonds
Learn these basic terms to breakdown this seemingly complex investment area. 
Financial Advisor
Present Value Of Different Bond Types Using Excel
To determine the value of a bond today  for a fixed principal (par value) to be repaid in the future  we can use an Excel spreadsheet. 
Personal Finance
Coupon Shopping: Clip Your Way To Savings
Use coupons strategically to score big savings on everyday purchases.
RELATED FAQS

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 >> 
How does a bond's coupon interest rate affect its price?
Find out why the difference between the coupon interest rate on a bond and prevailing market interest rates has a large impact ... Read Answer >> 
When is a bond's coupon rate and yield to maturity the same?
Find out when a bond's yield to maturity is equal to its coupon rate, and learn about the components of bonds and how they ... Read Answer >>