Dictionary of Banking Terms: bond equivalent yield
bond equivalent yield
investment yield of a bond purchased at discount from face value, such as a U.S. Treasury bill or municipal bond, expressed as a percent. These securities do not pay monthly, quarterly, or semi-annual interest, as interest-bearing securities do. For Treasury bills with maturities of three or six months, the formula for converting discount yield basis to the bond equivalent is as follows:
Also called coupon equivalent yield or equivalent bond yield.
Dictionary of Finance and Investment Terms: bond equivalent yield
bond equivalent yield
restatement of a discount yield as its interest-bearing equivalent.
