Yield-to-maturity (YTM)

The annualised rate of return to a bond investor if the bond is purchased today and held until maturity. Fluctuates according to the market price of the bond, which is influenced by the prevailing interest rate and company risk factors.

Investor will only realise the yield-to-maturity if:

  • Bond is held to maturity
  • The issuer does not default on any of the scheduled payments
  • All coupon payments received are reinvested immediately at the same yield
Also Known As:
Market yield
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