What Is a Bond Yield?
The coupon rate is the payment as a percent of the bond's face value.
Video coming soon. The lesson video will appear here once it is published on YouTube.
Check yourself: sample questions
Think about each question, pick what you would answer if you like, then select “Show answer” to see the solution and why. Nothing is graded or sent to us. Example numbers are worked examples, not predictions.
1.A 1,000 bond pays 65 a year. What is its coupon rate?
The coupon rate is the payment as a percent of the bond's face value.
2.What is the current yield?
Bond prices move opposite to interest rates, so the price paid changes the current yield.
3.The bond costs 1,050. Is the current yield above or below 6.5 percent?
The coupon stays at 65, but you pay more for it: 65 divided by 1,050.
Full course: 5 more questions for this lesson
The full course unlocks all self-check questions of all 365 lessons, the daily plan, your progress and the printable learning record. Lessons 1 to 7 are completely free.
See the full course Start the free week
Already bought? Open the course on this device
Sources (3)
- FINRA, Bonds (Investor page
- FINRA, What to Know Before Saying Hi to High-Yield Bonds (17. January 2023)
- Eigene Rechnung: Current Yield bei Preis 1.050, Rueckruf Rendite
Education only. Not financial advice.