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Definition of 'Effective Yield'
The yield of a bond, assuming that you reinvest the coupon (interest payments) once you have received payment.
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Investopedia explains 'Effective Yield'
Reinvesting the coupon will produce a higher yield because interest is earned on the interest payments.
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Learn the natural log and exponential functions used to calculate this value.
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Investing in bonds - What are they, and do they belong in your portfolio?
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Learn the complex concepts and calculations for trading bonds including bond pricing, yield, term structure of interest rates and duration.
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