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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CHAPTER · INVESTMENT FOUNDATIONS · FOUNDATIONSHow Bonds WorkRELATED TERMS
SOURCES
- Treasury Bills. U.S. Department of the Treasury, TreasuryDirect.