An alternative measure of yield that is used to make securities usually quoted on a discount basis comparable with those quoted on the more usual return on the amount invested. Stating interest at the coupon-equivalent rate is useful for securities, such as Treasury bills and commercial paper, sold at discounts from face value. As an example, a $10,000, 91-day Treasury bill selling for $9,750 is usually quoted at ($10,000 -
$9,750/
$10,000 ) × (
360 days/
91 days ) = 9.89 % However, the coupon-equivalent rate calculated on the amount of money invested is ($10,000 -
$9,750/
$9,750 ) × (
360 days/
91 days ) = 10.14 % See also
bank-discount basis.