Yield to maturity formula
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Bond yield vs interest rate.
What Is Bond Yield?What happens when bond yields rise
What happens when bond yields rise Bond yield and interest rate relationship Bond yield vs interest rate Bond yield calculator excel Bond price calculator
Bond yield refers to the rate of return an investor can expect to receive on their bond investment, expressed as a percentage of the bond's face value.
In simple terms, it is the amount of money an investor will earn through periodic interest payments when they buy a bond.
Types of Bond Yields
There are several types of bond yields that investors and financial analysts use to assess the potential returns and risks associated with investing in a particular bond.
Nominal Yield
Nominal yield, also known as coupon yield, is the annual interest rate that a bond issuer pays to investors.
It is based on the bond's face value, also known as its par value, which is the amount that the issuer will pay to investors at maturity.
For example, a bond's nominal yield is 5%, and its face value is $1,000. In that case, the investor can expect to receive $50 per year in interest payments from the issuer until the bond reaches maturity.
Current Yield
Current yield is a measure of the annual return an investor can expect to receive from a bond investment base
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- how is bond yield to maturity calculated