The adjusted current yield is a
financial term used in reference to
bond
Bond or bonds may refer to:
Common meanings
* Bond (finance), a type of debt security
* Bail bond, a commercial third-party guarantor of surety bonds in the United States
* Chemical bond, the attraction of atoms, ions or molecules to form chemica ...
s and other
fixed-interest securities. It is closely related to the concept of
current yield
The current yield, interest yield, income yield, flat yield, market yield, mark to market yield or running yield is a financial term used in reference to bonds and other fixed-interest securities such as gilts. It is the ratio of the annual in ...
.
The adjusted current yield is given by the current yield with addition of
Here ''Face value'' is the
face value
The face value, sometimes called nominal value, is the value of a coin, bond, stamp or paper money as printed on the coin, stamp or bill itself by the issuing authority.
The face value of coins, stamps, or bill is usually its legal value. Ho ...
of the bond, and ''Clean price'' is the
clean price
In finance, the clean price is the price of a bond excluding any interest accrued since bond's issuance and the most recent coupon payment. Comparatively, the dirty price is the price of a bond including the accrued interest. Therefore,
:
In B ...
of the bond (i.e.
present value
In economics and finance, present value (PV), also known as present discounted value, is the value of an expected income stream determined as of the date of valuation. The present value is usually less than the future value because money has in ...
of the bond with
accrued interest
In accounting accrued interests are generally computed and recorded at the end of a specific accounting period as adjusting journal entries used in accrual-based accounting.
In finance, accrued interest is the interest on a bond or loan ...
subtracted).
Formula for adjusted current yield
In total the ''adjusted current yield'' is given by
Mathematical finance
Bond valuation
Fixed income analysis
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