Yield to maturity takes into account the interest rate, the current price, the difference between the current price and the par value, and the amount of time remaining until the bond matures. It is calculated using a complex formula. Discount - A bond is said to be trading at a discount if the current market price is less than the par value. Premium - A bond is trading at a premium if the current market price is greater than the par value. Inflation - Inflation is the reduction in the purchasing power of money over time.
Inflation is a very important factor in the bond market.
Bonds with longer maturities have greater inflation risk. Point - One percentage point. This term is commonly used when talking about movements and differences in bond yields. One one-hundredth of a percent. This is also commonly used when talking about movements and differences in bond yields.