Yield To Maturity

Yield to Maturity (YTM) is the total annualised return an investor can expect to earn if they purchase a bond today and hold it until it matures, assuming all coupon payments are reinvested at the same rate. It accounts for the bond's current market price, face value, coupon payments, and time remaining to maturity. YTM is the most comprehensive measure of a bond's return and enables meaningful comparison across bonds with different coupon rates, prices, and maturities. When bond prices fall, YTM rises—and vice versa—making it an essential concept for fixed-income investors managing interest rate risk.