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What Is a Bond's Current Yield? How Does the Current

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Essay

What is a bond's current yield? How does the current yield differ from the yield to maturity and what determines how close the two values are?


Definitions:

Nominal Interest Rate

The interest rate before adjusting for inflation, representing the surface rate at which interest is paid by a borrower for the use of money.

Exchange Rate

The price measured in one country’s currency of purchasing one unit of another country’s currency

Employment

The condition of having paid work or the number of people within an economy who are currently employed.

Net Taxes

Refers to the total amount of taxes paid by businesses and individuals to the government, minus any refunds, credits, or benefits received, representing the actual tax burden.

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