A measure that converts the YIELD of a FIXED INCOME discount instrument into terms of a standard COUPON instrument, permitting proper comparison of investment alternatives. It is generally computed via: where Face is FACE VALUE, P is purchase price , n, is the number of days in the year following issuance, and nMAT is the number of days until maturity. See also DISCOUNT YIELD , SIMPLE YIELD , TAXABLE EQUIVALENT YIELD , YIELD TO CALL , YIELD TO MATURITY .
Black’s Law Online Dictionary
