You are here

The Yield to Market Curve

30 April, 2015 - 10:25

Yield to Market refers to the following calculation:

Current Yield = \frac{Annual Interest Payment}{Current Price}

Yield to market is also called Current Yield.

So, for example, if you had a bond that payed $40 semiannually, and the current price of the bond was $940, the Yield to Market would be 8.51%.

Yield to Maturity is not a very good measure of a bond's value. It does not take into consideration the price paid for the bond, nor the prevailing interest rates, nor the credit rating of the bond.