Yield to maturity
The percentage rate of return paid on a bond, note, or other fixed income security if the investor buys and holds it to its maturity date. The calculation for YTM is based on the coupon rate, length of time to maturity, and market price. It assumes that coupon interest paid over the life of the bond will be reinvested at the same rate.
Nearby TermsYield to average life Yield to call Yield to maturity Yield to warrant call Yield to warrant expiration
Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University