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.¹ 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.²

References

Thau, Annette (2001). The Bond Book (Revised ed.). New York: McGraw-Hill. p. 3. ISBN 0-07-135862-5.
Thau p. 4.

[1] Thau, Annette (2001). The Bond Book (Revised ed.). New York: McGraw-Hill. p. 3. ISBN 0-07-135862-5.

[2] Thau p. 4.

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