Comment by jpmoral
3 years ago
Question about the "Yields of Australian Commonwealth government bonds as of 21 January 2000" graph in Chapter 2 (page 13 of the A4 version):
The y-axis (Yield in percent) values don't seem to match the data points. For example, the point for Feb '01 is labelled '7%' but the point is just above the 6% mark and well below the 6.5%. What am I not understanding?
Coupon is the bond’s interest rate, per 100 nominal. Yield is the effective return on the money per 100 cash paid, so allowing for price. Coupon ≢ Yield.
That's the coupon, rather than the yield.
Ah, thank you!