What are the specific bond yields?
Specifically, bond yields include current bond yields, maturity bond yields, bond holding period yields and bond early redemption yields.
As far as the current rate of return is concerned, it refers to the ratio of the annual interest income of bonds to the current market price of bonds. At present, the rate of return only measures the ratio of cash income to bond price in a certain period, without considering the gain or loss caused by the bid-ask difference when investing in bonds.
Yield to maturity refers to the average annual rate of return that investors can obtain by buying at the current market price and holding it all the time. Yield to maturity is usually recorded in the bond contract.
Holding period yield refers to the ratio of interest income plus bid-ask spread to bond purchase price during the period when investors hold bonds. In other words, investors will use this rate of return when transferring fixed-term interest-paying bonds to other investors.
About the early redemption rate of return, it refers to the rate of return that investors get when bond issuers redeem bonds before the stipulated maturity date. Ordinary bonds redeemed in advance.
What kinds are commonly used?
All the bond yields mentioned above have applicable scenarios, but yield to maturity is the most widely used reference for most investors when buying bonds.
Generally speaking, if you buy bonds directly at face value, you can get the yield by dividing the interest income by the price of the bonds you buy as long as you hold the bonds on the maturity date; For bonds purchased at a market price higher or lower than the par value, it is only necessary to add capital gains and losses to the molecule, that is, (interest income+capital gains and losses)/purchase price.