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effective yield

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Financial Dictionary

Effective Yield

The yield of a bond, assuming that you reinvest the coupon (interest payments) once you have received payment.

Investopedia Commentary

Reinvesting the coupon will produce a higher yield because interest is earned on the interest payments.

Related Links

Bond Basics Tutorial
Advanced Bond Concepts
Advantages Of Bonds

See also: Bond, Compounding, Coupon, Current Yield, Interest Rate, Yield

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