Nominal yield, also known as the coupon rate, is the interest rate stated on a bond, representing the rate of return the bondholder will receive annually, as a percentage of the bond's face value. The term "nominal" means "in name only," indicating that this yield is the rate by which the bond issuer agrees to pay interest on the bond, but it may not necessarily reflect the actual return that investors receive.

For example, if a bond has a face value of $1,000 and a coupon rate of 5%, the nominal yield will be $50 per year ($1,000 x 5%). This means that the bondholder will receive $50 annually in interest payments until the bond matures or is sold.

It's important to note that the nominal yield does not take into account any changes in the bond's price or market conditions, such as inflation or changes in interest rates. As a result, the actual return an investor receives may differ from the nominal yield, depending on these factors.

Additionally, nominal yield is only one of several metrics used to evaluate a bond's performance, and investors should consider other factors, such as the bond's credit rating, maturity date, and market conditions, when making investment decisions.