[Verse 1] Picture Sarah with a thousand-dollar bond today Annual coupon brings her eighty every year Current yield is simple math that lights the way Divide that eighty by the price - crystal clear Eight percent emerges when she bought at par But if the market shifts, those numbers drift afar [Chorus] Current yield equals annual coupon over market price Simple fraction, quick reaction, calculated twice But YTM runs deeper than the surface gleam Yield to maturity captures every payment's dream Time value, final value, rolled into one theme The truest measure of your bond investing scheme [Verse 2] When bonds trade below their face, discount appears Premium pricing lifts them high above the norm Current yield ignores the gains across the years Missing capital appreciation's hidden form YTM considers every dollar you'll receive Plus the difference time and compound will achieve [Chorus] Current yield equals annual coupon over market price Simple fraction, quick reaction, calculated twice But YTM runs deeper than the surface gleam Yield to maturity captures every payment's dream Time value, final value, rolled into one theme The truest measure of your bond investing scheme [Bridge] Nine-hundred dollar bond with fifty dollar flow Current yield shows five point six, but that's not all YTM includes that hundred profit when you go To maturity's embrace, answering the call Discount bonds show YTM higher than current Premium bonds reverse the current, flow concurrent [Verse 3] Professional analysts prefer the YTM Internal rate of return that equalizes cash Present value calculation, not a simple stem Current yield stays surface-level, quick as flash Both have purpose in your analytical kit Context determines which measure truly fits [Chorus] Current yield equals annual coupon over market price Simple fraction, quick reaction, calculated twice But YTM runs deeper than the surface gleam Yield to maturity captures every payment's dream Time value, final value, rolled into one theme The truest measure of your bond investing scheme [Outro] Two yields dancing in the market's endless flow Current for the moment, YTM to grow
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