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    Difference in Yield Types

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    What is the difference between the following yields: coupon rate, current yield,yield to maturity?

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    Coupon rate is the annual interest rate stated or specified on that face of your mortgate note. Also, known as the Nominal Interest Rate. This is the interest rate that the issuer of a debt security agrees to pay to the holder of that security untily maturity. For example, a bond with a 7% coupon rate will pay $70 per ...

    Solution Summary

    This solution provides clear definitions, including equations, for coupon rate, current yield, and yield to maturity and also differentiates between them.