Investorpedia says: The interest rate stated on the face of a bond, which represents the percentage of interest to be paid by the issuer on the face value of the bond. Stalla says: Nominal yield on a fixed-income security is that single interest rate that discounts all its cash flows so that the sum of the present values of the cash flows equals the market price. The nominal yield does not necessarily equals the coupon rate of the bond. … is it just me or are they talking about two different things? WHAT is nominal yield ?? regards
Nominal yield = coupon yield according to schweser exam #1.
kk thank you!
If the bond is selling at par, they are the same. If not, Stalla is right. Edit: Oops - Investopedia is right - whoever said it’s the thing printed on the front of the bond.
This is from Wikipedia. “Nominal yield is the coupon rate of a fixed income security, which is a fixed percentage of the par value. Unlike current yield, it does not vary with the market price of the security.”
yeah seems like Nominal Yield = Coupon Rate while YTM = IRR of a bond
Correct rouman!