HTTP vs HTTPS The significance of S: Http or the hypertext transfer protocol is something we use when we access the internet. Though we seldom notice it if at all, it plays a very essential role.
This is because the interest rate risk (risk of missing out on higher interest rates) decreases the closer bonds get to their maturity dates. With that, let's use the Bond Value Calculator to calculate the price of a bond given its face value, coupon rate, market rate, and years-to-maturity. Next enter the current market rate and the number of years to maturity, then click the Calculate Bond Valuation button.
A bond's coupon rate is the actual amount of interest income earned on the bond each year based on its face value. A bond's yield to maturity is the estimated rate of return based on the assumption it is held until maturity date and not called. Yield to maturity includes the coupon rate within its calculation. Investors are more likely to make investing decisions based on an instrument's yield to maturity than its coupon rate.