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Essay heading: Yield To Matrity
 
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Issue: Business
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Date added: June 4, 1996
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No of pages / words: 2 / 410
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In the case of the co-worker purchasing a 10% bond that has a 9% yield to maturity, it is assumed that the investor will hold the bond until its maturity date and reinvest the interest from the same YTM. If this does not happen the ROR will be different form the quoted YTM rate. The broker sold the bond at a premium...
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If this does not happen the ROR will be different form the quoted YTM rate. The broker sold the bond at a premium. As a result the co-worker could possible take a loss. Conclusion Yield to maturity addresses the overall rate of return. With rates constantly changing matching the actual YTM is extremely difficult...
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