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Yield-to-Maturity (YTM)
Definition
(Expression) A yield expressed as a percentage which is used to compare one bond to another. It assumes that the invested principle will be returned on a specified date, the same rate of interest will be paid every year, and that the interest will earn interest at that same rate until the bond comes due.Usage: The YTM of a bond is not comparable to the current yield on a stock or annuity because it assumes the return of your principle and that interest paid will be compounded at the same rate until the due date of the bond.
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