Stock Market Investors » Glossary of Stock Terms » What is Yield to Maturity?

What is Yield to Maturity?

Yield to Maturity is usually associated with bond investing. It is very useful measurement, but its calculation is very complicated. Under the assumption that the generated interest payments are invested back in the coupon rate of the bond, yield to maturity includes:

Current market price
Coupon rate
Time to maturity

Since the calculation of this measurement is very difficult and involves many considerations, it is advisable to use special software for these purposes. Additionally, many programmable business calculators are available to facilitate your work.

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For knowledge we can highly recommend you subscribe to the The Wall Street Journal.

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