Bond yield quick approximation formula

Tags: bonds pricing and analysis

Description of the Bond yield quick approximation formula

Formula for a quick approximation of a bond's yield. The closer the bond is to maturity, the more precise the result.

Formula

r = I + \frac{(R - P)}{N}

Symbols

I

Nominal coupon rate

N

Number of periods (years)

P

Bond clean price

R

Bond redemption price

Additional information related to this formula

Related definitions from the glossary of financial terms

Bond • Clean price • Coupon • Yield

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