The yield-to-maturity (ytm) is the
A) Return on the bond at maturity.
B) The coupon rate on the bond.
C) The internal rate of return of the bond.
D) The coupon rate divided by the current price of the bond.

Question

Quizplus · Accepted Answer

The yield-to-maturity (ytm) is the internal rate of return of the bond, which is the rate at which the present value of the bond's cash flows is equal to its current market price. This takes into account not only the bond's coupon rate, but also the bond's price, maturity, and any call or put provisions.

The Yield-To-Maturity (Ytm) Is the