Series 50: Nominal Yield

Taken from our Series 50 Online Guide

Nominal Yield

Market interest rates may change dramatically during the life of a bond, but the nominal yield of a bond will always reflect the interest rate stated on the bond certificate. For example, a $1,000 par bond that has an 8% nominal yield will pay $80 in interest each year. This is calculated by multiplying $1,000 x 0.08 to get $80. The nominal yield is always equal to the coupon rate.

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