Bond Equivalent Yield
Bond equivalent yield places a short-term discount return or periodic bond yield on a stated annual bond-style quotation basis for comparison.
Fixed-income yield concepts for separating contractual coupon, current income, price-implied redemption yield, and quotation conventions.
Core bond yield measures translate coupon cash flows, principal, market price, and time into percentages used for different analytical questions. The same security can show several valid yields because each measure includes different cash flows or annualization assumptions.
Bond Yield provides the full comparison framework. Current Yield isolates coupon income at today’s price. Bond Equivalent Yield explains how short-term or periodic returns are placed on a bond-style annual quotation basis.
| Question | Starting measure |
|---|---|
| What coupon is contractually paid on face value? | Coupon rate |
| What annual coupon income does today’s price buy? | Current yield |
| What price-implied yield applies through final maturity? | Yield to maturity |
| What if the bond is redeemed on a call date? | Yield to call and yield to worst |
| How does a bill or periodic yield compare on a bond-style basis? | Bond equivalent yield |
| What did the investor actually earn over a period? | Holding-period return or realized yield |
Confirm price basis, accrued interest, settlement date, coupon frequency, day count, compounding, maturity, call schedule, and principal payments before comparing yields. Then review credit, liquidity, duration, taxes, costs, inflation, and currency.
A yield quote is a compact model output, not a promise. Use Yield Measures and Redemption Yields when maturity, call, average-life, or worst-case redemption assumptions control the decision.
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Bond equivalent yield places a short-term discount return or periodic bond yield on a stated annual bond-style quotation basis for comparison.
Bond yield is a return quotation linking price with coupon, principal, timing, and redemption assumptions for fixed-income comparison.
Current yield is annual coupon income divided by a bond's current market price, providing a quick income measure that excludes redemption and price-return effects.