Bond price, current yield, YTM and duration
Separate today’s coupon ratio from discounted future cash flows.
Coupons follow face value
A 5% coupon on 1,000 face pays 50 per year, regardless of whether the market price is 950 or 1,050. Current yield divides that 50 by the price. It does not by itself measure the effect of principal redemption.
YTM prices the full schedule
Yield to maturity is the discount rate connecting price to the promised coupon and principal cash flows under a stated compounding convention. A zero-coupon bond still has a YTM because its purchase price and later principal payment differ.
Duration is sensitivity, not maturity
Macaulay duration is a present-value-weighted average payment time. Modified duration adjusts it for the yield convention to describe local sensitivity. Large yield moves, convexity, embedded options and credit changes can make a linear duration estimate inadequate.
Settlement matters
Our tool settles immediately after a coupon. A purchase between dates requires accrued interest and day-count conventions. A clean market quote is not automatically the full cash paid.