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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Nominal Yield

Definition:

The coupon, or percentage that the bond makes, is the nominal yield of a bond—and it always stays the same. The bond may trade up or down, but the nominal yield stays the same.

By the way, "nom" means "name" in Latin. We showed up in class that day.

Example

A bond has a $1,000 par value, 8% coupon, is due 2034. In trade, the bond might be worth $800 a year from now, $1200 six months from now, and so on. The nominal yield, though, is 8%. Is now, always will be.