How does yield to maturity differ from the coupon rate?

The coupon rate is a fixed percentage of face value. Yield to maturity is computed on the price you actually pay and includes the difference between that price and the face value returned at the end. Buy below par and your yield exceeds the coupon; buy above par and it falls short.

What is duration for?

Duration is the average time it takes for the investment to return as cash. The practical form is modified duration: it shows by what percentage the price moves if the yield rises by one percentage point. Longer issues react more strongly to rates.

Why does the result differ from the exchange figure?

The exchange applies its own day-count conventions and includes accrued interest in the trade price. Here the calculation runs on the issue's cash flow and the price you entered. A fraction of a percentage point apart is normal; a difference of several times means the issue parameters are wrong.

Calculators

Bond yield calculator

Yield to maturity, current yield and duration: what a bond returns if held to the end.

Security

RU000A0JX413

Face value, ₽

Coupon rate, % p.a.

Payments per year

twice a year

Years to maturity

Purchase price, ₽

Result

Fill in the fields to see the calculation.

How to use it

1
Pick an issue
Start typing a ticker or ISIN — the platform fills in face value, coupon, payment frequency and maturity date.
2
Check the price
The last known price is filled in. If you are buying at a different one, enter yours.
3
Read the result
Yield to maturity, current yield and duration are in the table below the form.

Questions

How does yield to maturity differ from the coupon rate?: The coupon rate is a fixed percentage of face value. Yield to maturity is computed on the price you actually pay and includes the difference between that price and the face value returned at the end. Buy below par and your yield exceeds the coupon; buy above par and it falls short.
What is duration for?: Duration is the average time it takes for the investment to return as cash. The practical form is modified duration: it shows by what percentage the price moves if the yield rises by one percentage point. Longer issues react more strongly to rates.
Why does the result differ from the exchange figure?: The exchange applies its own day-count conventions and includes accrued interest in the trade price. Here the calculation runs on the issue's cash flow and the price you entered. A fraction of a percentage point apart is normal; a difference of several times means the issue parameters are wrong.

What this figure does not mean

Yield to maturity assumes the bond is held to maturity and every coupon is reinvested at the same rate. Neither is guaranteed. The calculation ignores tax, broker fees, call options and principal amortisation; for a floating-coupon issue future payments are unknown, and the figure is an estimate at the current rate.