When a bond is issued, the issuer promises to pay investors some interest each year, called the coupon. Total interest paid by the bond in a year as a percentage of its face or par value is the coupon rate. The yield (or current yield) is the total earnings from the bond divided by its current market price. There's an inverse relationship between a bond's yield and its market price.
The yield-to-maturity (YTM) is the return a bond investor would earn if he buys it today at its market price and holds it until its maturity.
How are these measures different?
The coupon rate tells you how attractive a bond is at launch. The other two measures tell you how attractive it is if you are going to purchase it from the secondary market.
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