To calculate the yield to maturity on a bond, it is necessary to know the
A) inflation rate.
B) T-bill rate.
C) coupon payments.
D) zero-coupon rate.

Question

Quizplus · Accepted Answer

Yield to maturity (YTM) is the total return anticipated on a bond if the bond is held until it matures. It is determined by taking into account the bond's current market price, its par value, the coupon rate, and the time remaining until maturity. Coupon payments are an essential component in the calculation of the YTM. Therefore, knowing the coupon payments is necessary to calculate the YTM accurately. Inflation rate, T-bill rate, and zero-coupon rate may be relevant in other bond valuation methods but are not required for calculating YTM.

To Calculate the Yield to Maturity on a Bond, It