📝 One-liners · 66 cards
CALCULATION OF YTM
What does YTM stand for in bond valuation?
YTM stands for Yield to Maturity, which is the total return anticipated on a bond if it is held until it matures.
What is the primary purpose of calculating YTM for a bond investor?
To determine the total annualised return if held to maturity.
How is YTM defined in the context of debt instruments?
YTM is the internal rate of return (IRR) of a bond, i.e., the discount rate that equates the present value of all future cash flows (coupon payments and face value) to the bond's current market price.
Which method is most accurate for calculating YTM: approximate formula or trial-and-error?
Trial-and-error with interpolation is more accurate.
🔒
Unlock 66 revision one-liners
Interactive flashcard deck — flip every card to drill questions and answers, mark the ones you got wrong, and revise smarter for CALCULATION OF YTM.
🪙
Unlock cost
300 coins
30-day access · re-unlocks free for 30 days