Nominal yield

Also found in: Wikipedia.

Nominal yield

The income received from a fixed income security in one year divided by its par value. See also: Coupon rate.

Coupon Rate

The interest rate that a bond pays to a bondholder, usually semi-annually. The coupon rate is stated on the bond. This is also called the nominal yield or the yield rate.

Nominal yield.

Nominal yield is the annual income that you receive from a bond or other fixed-income security divided by the par value of the security.

The result, stated as a percentage, is the same as the rate of interest the security pays, also known as its coupon rate.

If you purchase the security in the secondary market, at a price above or below par, your actual yield will be more or less than the coupon rate.

So, for example, if you have $55 in annual income on a $1,000 bond, the nominal yield is 5.5%. But if you paid $975 for the bond in the marketplace, your actual yield is 5.64%. Similarly, if you had paid $1,050, your actual yield would be 5.23%.

Mentioned in ?
References in periodicals archive ?
If market interest rates fall, that particular paper's worth will rise as its given nominal yield becomes more attractive, and prices respond accordingly.
This model of the term structure of interest rates with a time-varying quantity of bond risk however does not generate enough variability in nominal bond risk premia (or expected nominal bond excess returns) to match the variability uncovered by predictive regressions of nominal bond excess returns on lagged nominal yield spreads and forward rates.
It makes sense that frightened buyers are eager to pay a safety premium to bond issuers which exceeds the credit premium, thus making the nominal yield negative.
Next, the normalized cointegrating vector (the first element corresponds to the dependent variable, in ml, the second and third to In y and nominal yield on Two-year T-notes) is close to the theoretical expectation in Fisher's equation: that the coefficient of the real income in the long run should be equal to one in magnitude.
What we show here is inflation expectations as a percent of nominal yield (see Exhibit 2).
They're buying 5-year index-linked bonds with a nominal yield of minus 0.
COUPON RATE: This is the interest rate that a bond pays, also called nominal yield, and is expressed as a percentage of face value.
It is also called nominal yield and is expressed as a percentage of face value.
5) The break-even inflation rate is the spread between a TIPS yield and a nominal yield with a similar maturity.
2) But the calculation is based on comparing two TIPS yields, not a TIPS yield with a nominal yield, and so the technical factors that Campbell, Shiller, and Viceira cite as pushing down TIPS prices in the fall of 2008 should not distort this calculation, unless they affected one TIPS issue more than the other.