Bond-equivalent yield

CFA Level I Glossary

Bond-equivalent yield restates a yield on a semiannual bond basis so instruments with different payment frequencies can be compared. Money-market and annual-pay quotes are often converted to this form before ranking. The point is comparability under a shared convention, not a claim that every bond actually pays semiannually. A classic trap is comparing a bond-equivalent yield directly to an effective annual rate without converting.

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