yield to maturity (YTM)

yield to maturity (YTM) definition - business

yield to maturity (YTM)

The annual return on a bond held to maturity when interest payments and price appreciation (if priced below par) or depreciation (if priced above par) are considered. Bond quotations are generally on a yield-to-maturity basis, although an investor who sells a bond before maturity may earn a yield different from the yield to maturity as calculated at the time the security was purchased. See also internal rate of return, maturity basis.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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