GLOSSARY · INVESTING

Yield to maturity

The yearly return a bond pays if it is bought at today's price, every interest payment is received, and it is held until the face value is repaid. It accounts for the coupon and for any gain or loss between the price paid and the face value, which makes it the usual figure for comparing bonds. Current yield, the coupon divided by the price, ignores that gain or loss.

Also called: YTM, bond yield, redemption yield
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HYSA vs T-bill vs CD vs MMF after tax →After federal and state tax, where should my cash sit?
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CHAPTER · INVESTMENT FOUNDATIONS · FOUNDATIONSHow Bonds Work
RELATED TERMS
Duration (bonds)Real return
SOURCES
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