Yield to Worst (YTW)
The lowest yield across all possible call/put/maturity scenarios — the conservative yield measure.
YTW is the minimum of YTM and all YTCs — it answers: 'What's the worst yield I could get?' For callable bonds, if rates drop, the issuer calls the bond and you get the lower YTC. If rates rise, the bond runs to maturity and you get YTM. YTW is the most conservative estimate of return. Why it matters: Premium callable bonds often show attractive YTM but may be called early, giving you much less. Bloomberg shows YTW as the primary yield for callable bonds. CFA L1–L2 emphasizes YTW as the appropriate yield for callable bond analysis.
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.