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Yield vs Coupon Confusion
Hi,
Can someone clear up my confusion with this list of bonds.
I was under the impression that the yield is the amount of the interest payment in a dollar amount divided by the price on the bond. However this rate sheet from ASB has thrown me in a bit of confusion.
https://www.asbsecurities.co.nz/rw/e...edInterest.pdf
Take for example the very top line NZ government bond maturing 15/4/2015.
The coupon is 6%
The yield is 2.78%
The price is $108.79
I would have assumed the yield would be 5.5% ($6/$108.79)
Can someone please explain?
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