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What is the meaning of the term Yield to Maturity?

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What is the meaning of the term Yield to Maturity?
posted Jul 10, 2017 by Ananya Saha

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1 Answer

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t is also known as redemption yield. As the name suggests, if an investment is held till its maturity date, the rate of return that it will generate will be Yield to Maturity.

Calculation of YTM is a complex process which takes into account the following key factors:

  1. Current Market Price
  2. Par Value
  3. Coupon Interest Rate
  4. Time to maturity

Despite its complexity the following formula can be used to find out its approximate value:

answer Jul 11, 2017 by Shubham Rajput
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