Yield to Maturity
Yield to maturity is the anticipated yield of a bond that is bought and held to maturity. It is, essentially, the rate of return over the life of the bond based on its current value in the market. Suppose you hold your $1,000-bond with a 4% coupon rate until maturity, receiving your annual $40 interest payments and your $1,000 principal in the tenth year. If the bond were selling at a current market value of $962,