Nominal yield
The coupon rate (nominal rate, or nominal yield) of a
fixed income security is the interest rate that the issuer agrees to pay to the security holder each year, expressed as a percentage of the security's principal amount or par value.[1] The coupon rate is typically stated in the name of the bond, such as "US Treasury Bond 6.25%". Unlike current yield
, it does not vary with the market price of the security.
Coupon rates are fixed for the life of the security, except in the case of
floating-rate bonds.[2]
References
- ISBN 0-07-135862-5.
- ^ Thau p. 4.
 | This economics-related article is a stub. You can help Wikipedia by expanding it. |