Enter bond parameters to calculate yield and YTM.
Frequently Asked Questions
What is bond yield?
Bond Yield = Annual Interest / Current Price x 100%. For example, a $1000 face value bond with 5% coupon trading at $950 has a current yield of 5.26%.
What is Yield to Maturity (YTM)?
YTM is the annualized total return if the bond is held to maturity, accounting for both interest income and price changes. When bought at a discount, YTM > current yield; at a premium, YTM < current yield.
How are bond prices determined?
Bond price = present value of future cash flows. When market rates rise, bond prices fall; when rates fall, prices rise. When YTM equals the coupon rate, the bond trades at par.
How does coupon frequency affect yield?
Higher payment frequency increases the effective annual yield because interest can be reinvested sooner. Semi-annual coupons provide slightly higher YTM than annual coupons.