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devlalit42
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devlalit42
Asked: September 26, 20222022-09-26T11:48:19+05:30 2022-09-26T11:48:19+05:30In: General Investment

What is the difference coupon rate and yield rate?

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I want to know the difference between coupon rate and yield rate

bonds marketcoupon rateinvestmentretail investorsyield rate
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    1. Mohan Ram
      2022-09-28T12:27:40+05:30Added an answer on September 28, 2022 at 12:27 pm

      Both refer to the amount of money that can be earned after all expenses have been paid. A coupon rate is found by dividing a coupon payment by the purchase price, therefore it represents the percentage of profit that can be returned at the end of every month. The yield rate, on the other hand, is foRead more

      Both refer to the amount of money that can be earned after all expenses have been paid. A coupon rate is found by dividing a coupon payment by the purchase price, therefore it represents the percentage of profit that can be returned at the end of every month. The yield rate, on the other hand, is found by dividing a monthly income (from a bond) by its purchase price, so it represents the average return that would be expected over time.

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    2. Aditya Verma
      2022-09-29T11:44:26+05:30Added an answer on September 29, 2022 at 11:44 am

      The coupon rate is the gross interest rate paid by a borrower in a given period. The yield rate is the annualized coupon rate divided by the amount lent out over that year.

      The coupon rate is the gross interest rate paid by a borrower in a given period. The yield rate is the annualized coupon rate divided by the amount lent out over that year.

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    3. rohanrajput
      2022-10-03T10:39:12+05:30Added an answer on October 3, 2022 at 10:39 am

      The coupon rate is the interest rate paid on a coupon bond and the Yield rate is the payment on a bond that reflects how much the market sells a bond for. They are two different things.

      The coupon rate is the interest rate paid on a coupon bond and the Yield rate is the payment on a bond that reflects how much the market sells a bond for. They are two different things.

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    4. Shara Sharma
      2022-10-03T11:23:38+05:30Added an answer on October 3, 2022 at 11:23 am

      Is coupon rate the same as yield to maturity?

      Is coupon rate the same as yield to maturity?

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    5. Nitu Aggarwal
      2022-10-04T15:20:52+05:30Added an answer on October 4, 2022 at 3:20 pm

      The correct answer is "No". I did not receive the same answer about yield to maturity in my class, even though I was clearly stating that yield to maturity is NOT the coupon rate. The textbook seems to be more fixed on coupon rates as this is what is used in DCF models (which by definition have to bRead more

      The correct answer is “No”.
      I did not receive the same answer about yield to maturity in my class, even though I was clearly stating that yield to maturity is NOT the coupon rate. The textbook seems to be more fixed on coupon rates as this is what is used in DCF models (which by definition have to be a function of coupon rates).

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    6. Mohan Lal
      2022-10-06T12:48:22+05:30Added an answer on October 6, 2022 at 12:48 pm

      There is a difference between coupon rate and yield to maturity (YTM). Yield to maturity represents the interest rate that would have been earned by investing the cash flows of investment in simple interest. Yield to maturity is calculated by discounting the cash flows at the current rate of interesRead more

      There is a difference between coupon rate and yield to maturity (YTM). Yield to maturity represents the interest rate that would have been earned by investing the cash flows of investment in simple interest. Yield to maturity is calculated by discounting the cash flows at the current rate of interest.

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    7. Raju Mehta
      2022-10-11T17:59:14+05:30Added an answer on October 11, 2022 at 5:59 pm

      The coupon rate is the interest rate paid on a bond by the issuer to the holder. It is a percentage of the bond's face value. The yield to maturity is the rate of return an investor will receive if they hold a bond until it matures. This takes into account the coupon payments and any price appreciatRead more

      The coupon rate is the interest rate paid on a bond by the issuer to the holder. It is a percentage of the bond’s face value. The yield to maturity is the rate of return an investor will receive if they hold a bond until it matures. This takes into account the coupon payments and any price appreciation or depreciation of the bond.

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