Yield to Maturity

Explanation

YTM is the bond market's equivalent of IRR (internal rate of return). It assumes all coupon payments are reinvested at the YTM rate — a simplification that may not hold in practice. YTM accounts for the coupon payments, the difference between purchase price and par value, and the time to maturity. When a bond trades at par, YTM equals the coupon rate. At a premium, YTM is below the coupon. At a discount, YTM is above the coupon. YTM is the standard metric for comparing bonds with different coupons and maturities.

How Stoquity Uses This

Stoquity incorporates yield to maturity analysis across its portfolio management platform, providing real-time monitoring and AI-powered insights for every portfolio.