yield to maturity


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Related to yield to maturity: Yield to call

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.

Yield to Maturity

The rate of return on a bond if it is held until maturity. This is expressed as an annual rate; the calculation of the YTM includes the coupon rate (if any), length of the bond, market value, and face value. Bond quotes are made in terms of the YTM, but an individual investor's yield may be different if he/she does not hold the bond, or if the bond is called before maturity.

yield to maturity (YTM)

The annual return on a bond held to maturity when interest payments and price appreciation (if priced below par) or depreciation (if priced above par) are considered. When a bond sells at par, the yield to maturity is the same as the current yield because price appreciation or depreciation is zero if the security is held to maturity. Bond quotations are generally on a yield-to-maturity basis, although an investor who sells a bond before maturity may earn a yield different from the yield to maturity as calculated at the time the security was purchased. See also internal rate of return, maturity basis.

Yield to maturity (YTM).

Yield to maturity is the most precise measure of a bond's anticipated return and determines its current market price.

YTM takes into account the coupon rate and the current interest rate in relation to the price, the purchase or discount price in relation to the par value, and the years remaining until the bond matures.

yield to maturity (YTM)

The internal rate of return of an investment, taking into consideration all incomes and expenses and their timing.

References in periodicals archive ?
Regardless of how the par value is distributed, at the ex coupon date a bond will sell for the remaining par value if and only if the contract rate equals the yield to maturity.
An individual who purchased a stripped tax-exempt bond or coupon after October 22, 1986 but before June 11, 1987 (except as provided below) is treated as if he bought a tax-exempt obligation issued on the purchase date having an original issue discount equal to an amount that produces a yield to maturity of the lower of: (a) the coupon rate of interest before separation, or (b) the yield to maturity, on the basis of purchase price, of the obligation or coupon.
These are services that list large numbers of bonds and give quality rating, coupon rate, current yield, and yield to maturity. These sources are also available on the Internet as follows: Moody's (www.Moodys.com); Standard & Poor's (www.standardandpoors.com); Fitch's (www.fitchratings.com).
Yield to call can be significantly lower than yield to maturity, which is the return a bondholder can expect to receive if the bond is held until maturity.
This note explains a rigorous proof that shows how the difference between the price of a bond and its face value are directly linked to the difference between the bond's coupon rate and its yield to maturity.
In addition, an approximation formula for calculating yield to maturity is presented as "the" yield to maturity equation.
- Assume a corporation issues an applicable instrument at the beginning of the year with an issue price of $100 and a yield to maturity of 20 percent in a month when the AFR is 9 percent.
The senior notes due 2026 have been priced at 99.893% of the principal amount with a yield to maturity of 3.817%, the senior notes due 2049 have been priced at 99.949% of the principal amount with a yield to maturity of 4.853% and the senior notes due 2024, have been priced at 102.368% of the principal amount plus interest deemed to have accrued since 15 January 2019, with a yield to maturity of 3.453%.
Georgian Sovereign Eurobonds (GEORG) closed at 110.9 (+0.4% w/w) at 4.4% yield to maturity.
Notes were offered to the public at 99.975 percent of the principal amount with a yield to maturity of 4.503 percent.
The notes were sold at a price equal to 107.5% of the principal amount thereof, for a yield to maturity of 6.12%.
The bonds are expected to carry a 4% coupon, payable semi-annually from June 16, 2011 and a yield to maturity of between 5.5% and 6.5%.