Yield to Maturity

Yield to Maturity (YTM) is the total return an investor can expect to earn if they buy a bond today and hold it until it matures. It accounts for the bond's current price, the fixed interest payments (coupons), and the repayment of the bond's face value at maturity. Essentially, YTM reflects the annualized rate of return, considering all cash flows and the current market price, allowing investors to compare bonds with different prices, interest rates, and maturities on a consistent basis.