Q » What is the difference between a bond's coupon rate and yield to maturity?

John

17 Oct, 2025

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A » The coupon rate of a bond is the annual interest rate paid based on its face value, while the yield to maturity (YTM) reflects the total return anticipated if the bond is held until maturity, considering its current market price, coupon payments, and time remaining. YTM accounts for changes in market interest rates and is often used to compare the profitability of different bonds.

Michael

17 Oct, 2025

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A »The coupon rate of a bond is the annual interest rate paid by the issuer, based on its face value. Yield to maturity (YTM), on the other hand, is the total return anticipated if the bond is held until it matures, factoring in its current market price, coupon payments, and time to maturity. Thus, while the coupon rate is fixed, YTM reflects current market conditions and can fluctuate.

Paul

17 Oct, 2025

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A »A bond's coupon rate is the annual interest rate it pays, while yield to maturity (YTM) is the total return an investor can expect if they hold the bond until maturity. For example, a bond with a 5% coupon rate and a market price of $900 may have a YTM of 6%, reflecting the capital gain from purchasing at a discount.

Edward

17 Oct, 2025

0 | 0

A »The coupon rate of a bond is the annual interest rate paid by the bond's issuer based on the bond's face value. Yield to maturity (YTM), however, is the total return anticipated on a bond if held until it matures, reflecting current market conditions, including bond price fluctuations. While the coupon rate is fixed, YTM varies with market price changes, providing a comprehensive measure of a bond's profitability.

Steven

17 Oct, 2025

0 | 0

A »A bond's coupon rate is the fixed interest rate it pays periodically, while yield to maturity (YTM) is the total return an investor can expect if they hold the bond until maturity, considering the coupon payments and the return of principal. YTM reflects the bond's market price and is a more comprehensive measure of its return.

Charles

17 Oct, 2025

0 | 0

A »The coupon rate of a bond is the annual interest rate paid by the issuer, based on the bond's face value, while yield to maturity (YTM) estimates the total return if held until it matures. For example, a bond with a $1,000 face value and a 5% coupon rate pays $50 annually. If bought at $950, YTM considers the $50 interest plus the $50 gain, indicating a higher return than the coupon rate.

Anthony

17 Oct, 2025

0 | 0

A »A bond's coupon rate is the fixed interest rate it pays periodically, while yield to maturity (YTM) is the total return an investor can expect if they hold the bond until maturity, considering the coupon payments and the return of principal. YTM reflects the bond's market price and is typically different from the coupon rate.

Matthew

17 Oct, 2025

0 | 0

A »The coupon rate of a bond is the annual interest payment percentage based on its face value, while the yield to maturity (YTM) reflects the total return anticipated if the bond is held until it matures. YTM considers the bond's current market price, face value, coupon interest rate, and time to maturity, thus providing a more comprehensive measure of a bond's potential profitability compared to its coupon rate.

Daniel

17 Oct, 2025

0 | 0

A »A bond's coupon rate is the annual interest rate it pays, while yield to maturity (YTM) is the total return an investor can expect if they hold the bond until maturity. For example, a bond with a 5% coupon rate and a YTM of 6% indicates it's selling at a discount, as investors demand a higher return than the coupon rate.

Print321

17 Oct, 2025

0 | 0

A »A bond's coupon rate is the annual interest rate paid by the bond's issuer, based on its face value. Yield to maturity (YTM), however, is the total return anticipated on a bond if held until it matures, considering current market price, coupon payments, and time to maturity. While the coupon rate is fixed, YTM fluctuates with market conditions and reflects the bond's true earning potential.

Joseph

17 Oct, 2025

0 | 0

A »A bond's coupon rate is the fixed interest rate it pays periodically, while yield to maturity (YTM) is the total return an investor can expect if they hold the bond until maturity, considering its current market price, coupon payments, and face value. YTM reflects the bond's overall return, whereas the coupon rate is just one component.

Christopher

17 Oct, 2025

0 | 0