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What does bond equivalent yield mean?

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bond equivalent yield
(BEY)
Noun

The total yield on investments that takes into account the interest applicable on bonds, which is the simple interest (uncompounded) semiannual bond yield on the actual/actual day-count basis used to compare bonds with financial instruments having varying characteristics that mature on the same date.

Synonym(s): 
  • coupon-equivalent rate; coupon-equivalent yield; effective yield; equivalent coupon yield; investment rate.
Comment: 
It ignores the compounding of the semiannual yield: semiannual YTM x 2.
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