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.{{cite book |last1=Thau |first1=Annette |title=The Bond Book |date=2001 |publisher=McGraw-Hill |location=New York |isbn=0-07-135862-5 |page=3 |edition=Revised}} 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.{{cite book |title=Thau p. 4}}

References

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{{Bond market}}

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Category:Bond valuation

Category:Fixed income analysis

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