Bond yield, which can be calculated in a variety of ways, is the return an investor receives on a bond. The return an investor receives from a bond investment is known as the bond yield. A bond may be bought at a premium, which is more than its face value, or at a discount, which is less than its face value.
A bond's yield might vary depending on whether it is bought for more than its face value (at a premium) or less than its face value (at a discount). The price of the bond and the coupon, or interest payment, both affect the current yield.
Bond yield equals coupon / price, or 1000*10%/1050, or 9.50%.
The annual interest rate set when the bond was issued is known as the coupon rate. The computations used to calculate a bond's yield are skewed by some factors.
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