btcapital

Nominal yield = coupon rate. It has nothing to do with market price or require any calculation. A 6% bond has a nominal yield of 6%.

YTM = discount rate that equates the cash flows to the market price of the bond. It is equal to the coupon rate if and only if the bond is selling at par (KNOW THIS).

Current Yield = coupon/market price of the bond.

Edit: Rate and Yield are mostly interchangeable so nominal yield = nominal rate. I've never heard anyone say "rate to maturity" but it wouldn't surprise me if they talked that way in New Zealand or something.



Edited 1 time(s). Last edit at Wednesday, November 12, 2008 at 08:24AM by JoeyDVivre.