Bond Equivalent Rate – Excel Template

Ivan Kitov
Ivan Kitov

The bond equivalent yield rate determines the annual yield on a discount or zero-coupon bonds with returns on a less-than-annual basis. To calculate it, you consider the holding period yield, which is the difference between the bond’s face value and market price divided by the market price. Then, you multiply this result by 365 and divide it by the number of days left until the bond’s maturity.

The bond equivalent yield allows investors to compare securities with different compounding periods. In this way, they can make strategic investment decisions when building their portfolios.

This open-access Excel template is a useful tool for bankers, investment professionals, corporate finance practitioners, portfolio managers, and anyone preparing a corporate presentation.

Bond Equivalent Rate is among the topics included in the Fixed Income module of the CFA Level 1 Curriculum. Gain valuable insights into the subject with our Math for Finance course.

You can also explore other related templates such as—Holding Period Yield, Bank Discount Yield, and Effective Annual Yield.