Yield to maturity (YTM )

The return an investor will receive if they buy a bond and hold the bond to maturity. It refers to the interest or dividends received from a security and are usually expressed annually or semi-annually as a percentage based on the investment’s cost, its current market value or its face value. Bond yields may be quoted either as an absolute rate or as a margin to the interest rate swap rate for the same maturity.

It is a very useful indicator of value because it allows for direct comparison between different types of securities with various maturities and credit risk Note that the yield and coupon are different

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