Fixed Income
Yield to Maturity
Definition
What is Yield to Maturity?
The annualised return implied by a bond's price if held to maturity and all promised payments occur and are reinvested as assumed.
Example in practice
How This Looks in Practice
A discount bond may have a yield to maturity above its coupon rate.
Keep learning
Related Terms
Fixed Income
Bond
A debt security through which an investor lends money to an issuer in return for promised payments.
Fixed IncomeIssuer
The government, company, or organisation that creates and sells a security.
Fixed IncomeFace Value
The principal amount stated on a bond and usually repaid at maturity.
Money MarketsTreasury Bill
A short-term government debt instrument usually issued at a discount and repaid at face value.