Yield to Maturity (YTM)


When you invest in a bond, one of the most basic things you need to know is the expected return. That’s where yield to maturity comes in. Also known as the internal rate of return for a bond, yield to maturity is the annual rate of return assuming a bond is held to maturity and all of the interest payments are reinvested at the original rate. It’s the most commonly used way to look at a bond’s expected return.

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