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Coupon Equivalent Rate |
Also found in: Acronyms, Wikipedia | 0.03 sec. |
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Coupon Equivalent Rate An alternative method of calculating the yield on a bond. It is used for zero-coupon bonds, as these are issued at discounts to their face value; that is, the CER states what the coupon rate would be if it carried a coupon and had been sold at face value. As such, it gives a more accurate picture of the yield of a zero-coupon bond. It is calculated as: CER = ((Market Price - Face Value) / Market Price) * (365 / Days until Maturity). Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
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