21.   While the yield to maturity is the single most commonly used measure of yield, it nevertheless has several disadvantages.

22.   The yield to par is the yield on bonds trading at or near their par values.

23.   The yield to par is therefore equal to the coupon rate for such bonds.

24.   Similarly, the operative yield is either the yield to maturity or the yield to relevant call depending on whether the bond is trading above or below par.

25.   In this case, the operative yield is the yield to maturity.

26.   In this case the operative yield is the yield to equivalent life.

27.   Equation shows that the money yield is the appropriate discount rate for discounting money or nominal cash flows.

28.   Equation shows that the real yield is the appropriate discount rate for discounting real cash flows.

29.   The par yield is therefore equal to the coupon rate for bonds priced at or near par.

30.   If the spot yield is the average return, then the forward rate can be interpreted as the marginal return.