What is the return from holding a bond and then selling it before it matures?

The return from holding a bond and then selling it before it matures is termed the holding period return. This concept captures the total return earned on an investment during the specific time frame in which it is held, reflecting both interest income (coupon payments) and any capital gains or losses resulting from selling the bond at a price that differs from its purchase price.

For instance, if you purchase a bond for a certain amount and hold it for a year, receiving coupon payments during that year, the return will factor in these payments as well as any change in the bond's market value when selling it. This calculation is critical for investors who may not hold bonds to maturity and want to evaluate their performance over a shorter horizon.

The yield to maturity refers to the total return anticipated on a bond if it is held until it matures, which does not apply when the bond is sold before maturity. The current yield measures the bond's annual coupon payment relative to its current market price, focusing solely on income rather than capital gains or losses. The term "supply yield" is not standard in the context of bond returns and does not represent any conventional measure in bond evaluation.