- a.k.a. coupon
- a.k.a. rate
- fixed amount of interest paid yearly
- sometimes> 6mo from dated date to first interest payment date
- interest payments 6mo apart
Current yield
- income: current market price
- yearly interest (nominal yield)/current market price
Yield to maturity
- YTM, current yield > nominal yield (discount bonds)
- YTM, current yield<nominal yield (premium bonds)
When a bond is selling at a premium which of the following would be the highest relative to the others?
- nominal yield, always highest in a premium bond
- YTM, basis, current yield< nominal yield
Discount bond
- lowest, nominal yield
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