corporate debt securities outline

Yield 

1. percentage-amount of investment return earned on debt instruments-bonds
2. nominal yield
3. current yield
4. yield to maturity
5. yield to call

Nominal yield

1. known as nominal rate, coupon, coupon rate
2. percent: amount of interest per $1000 the bond pays holders each year
3. a 12% bond pays 12% of 1000 or 120 every year of principal-holders get $60 of interest every six months plus the principal payment at the bond's maturity 

Current yield

1. investor currently gets for what an investor currently paid
2. amount investor receives/current market price
3. 10% bond selling for $900. $100/$900=11.1%

Yield to maturity

1. yield an investor receives based on interest paid each year, gain/loss, cost of bond
2. YTM and current yield move in the same direction
3. YTM moves more than C.Y. when price of bond changes 
4. called basis 
5. bond at premium high to low yields: nominal, current, basis (NCB) 
6. bond at discount low to high yields: nominal, current, basis (NCB)