Definition: Yield to Maturity is the most complicated, but the most useful calculation. It considers the current market price, the coupon rate, the time to maturity and assumes that interest payments are reinvested at the bond’s coupon rate. It is a very complicated calculation best done with a computer program or programmable business calculator. However, when you hear the media talking about a bond’s “yield” it is usually this number they are talking about.
Yield to Maturity
By Ken Little, About.com
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