Simple Yield
Approximate yield that assumes straight-line amortization of premium/discount — no compounding.
Simple yield (also called Japanese yield) is a quick approximation: (Annual Coupon + Annual Amortization) ÷ Clean Price. It ignores compounding and reinvestment, so it's less accurate than YTM but useful for quick mental math. For a par bond, simple yield equals the coupon rate. For discount bonds, simple yield > YTM (amortization is spread too evenly). For premium bonds, simple yield < YTM. Think of it as back-of-the-envelope yield — good for sanity checks but not pricing.
Current Yield
Annual coupon income divided by the bond's clean price.
Running Yield
Annual coupon income divided by the bond's dirty price (clean price plus accrued interest).
Yield to Maturity (YTM)
The annualized return if you hold the bond to maturity, assuming all coupons are reinvested at the same rate.
Dirty Price
The total settlement price paid for a bond, including accrued interest.
Clean Price
The quoted bond price excluding accrued interest.
Accrued Interest
Interest that has accumulated since the last coupon payment, paid by the buyer to the seller.