What is DISCOUNT YIELD?

The effective YIELD of any FIXED INCOME instrument issued on a discount, rather than COUPONbearing, basis, generally computed as: where Face is FACE VALUE, P is purchase price, and nMAT is the number of days until maturity. See also BOND EQUIVALENT YIELD, SIMPLE YIELD, TAXABLE EQUIVALENT YIELD, YIELD TO CALL, YIELD TO MATURITY.

More On This Topic



Link to This Definition
Did you find this definition of DISCOUNT YIELD helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary