One way to check the accuracy of the expected return on bonds is to compare the expected return to the YTM on recently-issued bonds with similar characteristics and risks.

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Comparing the expected return to the yield to maturity (YTM) on recently issued bonds with similar characteristics and risks provides a reliable way to check the accuracy of the expected return on bonds. By making this comparison, investors can determine whether the expected return is reasonable based on the prevailing market conditions and overall risk profile of the bond in question. If the expected return is significantly higher than the YTM of comparable bonds, for example, this may indicate that the bond is riskier than its peers, or that market conditions have changed in a way that affects the bond's potential return.

One Way to Check the Accuracy of the Expected Return