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Webster's New World Finance and Investment Dictionary » convenience yield
convenience yield
convenience yield definition - finance
A premium that is earned by people who hold a physical
commodity. A convenience yield reflects the near-term scarcity of the commodity
or underlying asset and it also reflects the preference that consumers have for
holding the equivalent cash position. Convenience yields show up as an
adjustment to the theoretical forward, or future, price of a commodity or the
future contract delivery price. Sometimes convenience yields are earned by
holders of a government bond that is in short supply in the repo market.
Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.
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