The greater of the yield-to-call or the yield-to-maturity is used as the appropriate indicator of value.

Question

Quizplus · Accepted Answer

The yield-to-maturity (YTM) is generally used as the appropriate indicator of value for bonds that are not callable. For callable bonds, investors might consider the yield-to-call (YTC) if the call date is near and they believe the bond will be called. However, the YTM is often viewed as the primary measure of return because it represents the total return anticipated on a bond if held to maturity, assuming all payments are made as scheduled.

The Greater of the Yield-To-Call or the Yield-To-Maturity Is Used