discount yield

Discount yield

The yield or annual interest rate on a security sold to an investor at a discount. A bond that is sold at $4875 that matures to $5000 has a discount of $125. To calculate the discount yield: (discount divided by the face value of the security) multiplied by the (number of days in the year divided by the number of days to maturity).

Discount Yield

A way to quote the price for bonds. It is calculated as the annualized yield assuming a 360 day year. One calculates the discount yield thusly:

Discount yield = (Discount from par value / par value) * (360 / Days until maturity)

The discount yield is also called the discount basis or the bank-discount basis.

discount yield

References in periodicals archive ?
The issue was awarded at a high discount yield of 0.140%, fractionally above the 0.139% for the $20 B April new issue.
For example, variable contribution margin costing revealed that, for some products, a 35 percent discount yielded only a 10 percent contribution margin; for others, a 60 percent discount yielded a 50 percent margin.