Bond Yield Visualizer

Bond Yield Visualizer Summary

This interactive tool visualizes the relationship between bond prices and interest rates for the Series 7 and SIE exams, updated for 2026. Bond prices and interest rates have an inverse relationship like a teeter-totter: when market interest rates go up, existing bond prices go down, and when rates go down, prices go up. The yield ladder displays four yields in the N-C-M-C order using the Nancy Currently Makes Calls mnemonic: N is Nominal yield or coupon rate which is fixed and never changes, C is Current Yield calculated as annual coupon payment divided by current market price, M is Yield to Maturity or YTM which is the total return if held to maturity including coupon payments and capital gain or loss using the approximation formula of annual interest plus annual gain or loss divided by average price, and C is Yield to Call or YTC which is the return if the bond is called early calculated the same as YTM but using call price instead of par and years to call instead of years to maturity. For discount bonds trading below par the yield order from lowest to highest is Nominal less than Current Yield less than YTM less than YTC. For premium bonds trading above par the order reverses: Nominal greater than Current Yield greater than YTM greater than YTC. At par all four yields are equal. Yield to Worst is the lowest yield assuming no default: for discount bonds YTM is typically yield to worst and for premium bonds YTC is typically yield to worst. Current Yield formula is annual coupon divided by market price. YTM approximation formula is annual interest plus annual gain or loss divided by average price where average price equals par plus market price divided by 2. YTC approximation formula is annual interest plus gain or loss to call divided by average price to call. Published by 2DollarTests.