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i am confusing the difference between interest rate and interest yield.
Besides,i didn’t not understand how the yield to maturity works?The interest rate is the coupon rate – i.e. the interest on the nominal/par value.
The interest yield is the actual return investors are receiving on the amount of the investment (i.e. the interest as a % of market value). The yield to maturity is the ‘overall’ return to investors (i.e. the IRR of the flows to the investor).
All of this is explained in my free lectures.
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