bond equivalent yield (BEY) definition

bond equivalent yield (BEY)

Income from a bond sold at a discount (see discount bond) as compared with the income from an interest paying bond (see coupon bond). It is the difference between the par values and purchase prices of the two types of bonds converted to a percentage. Most spreadsheet programs (such as Lotus 123 and Microsoft Excel) have built-in formulas to compute BEY. Also called coupon equivalent rate or equivalent bond yield.

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