Share This Article:

Economic Definition of YTM. Defined.

Offline Version: PDF

Term YTM Definition: The common abbreviation for yield to maturity, which is the annual rate of return on a financial asset that is held until maturity. Yield to maturity depends on both the coupon rate and the face or par value paid at maturity. If the selling price of a financial asset is equal to its par value, then the yield to maturity is equal to the current yield and the coupon rate. However, if the asset is selling at a discount, then the yield to maturity exceeds the current yield, which is greater than the coupon rate. And if the asset is selling at a premium, then the yield to maturity is less than the current yield, which is below than the coupon rate.

 

« yield to maturity | zero bond »

Permalink: http://glossary.econguru.com/economic-term/YTM

Alphabetical Reference to Over 2,000 Economic Terms