--%>

Define Yield to Maturity

Describe what do you mean by the term Yield to Maturity?

E

Expert

Verified

Yield to Maturity:

• The yield to maturity of a bond is the discount rate which makes the current value of the coupon and principal payments equivalent to the price of the bond.

• It is the yield which the investor earns when the bond is held to maturity and all the coupon and principal payments are prepared as promised.

• A bond’s yield to maturity modifies daily as interest rates rise or reduce.

• We can evaluate a bond’s yield to maturity by employing a trial-and-error approach.

   Related Questions in Microeconomics

  • Q : Problem regarding Bilateral Monopoly

    The bilateral monopoly model is most likely most applicable in analyzing a case where a: (1) Major employer collectively bargains with the influential union. (2) Firm consists of monopoly power in output market and monopsony power in the labor market. (3) Labor market

  • Q : Shifting of taxes on higher prices When

    When a tax on goat cheese is totally paid by consumers through higher prices, in that case the tax has been: (1) alleviated. (2) actualized. (3) backward shifted. (4) forward shifted. (5) randomized. Hello guys I w

  • Q : Sticky prices in oligopoly markets

    Sticky prices within oligopoly markets are: (w) predicted by the kinked demand curve model. (x) substantiated by many statistical studies. (y) most common for highly differentiated products. (z) a result of price discrimination.

    Q : Signals between buyers and sellers In

    In the competitive market economy, most of the prices: (i) Make sure high incomes for the bureaucrats. (ii) Free resources and ration free goods. (iii) Act as a signal among sellers and buyers. (iv) Are set by the govt.

    Q : Burden of tax reduce on suppliers of

    Most of the burden of an excise (i.e., per unit) tax would be borne through consumers of the taxed good, although some of the tax burden would reduce on suppliers of the good demonstrated in: (w) Panel A. (x) Panel B. (y) Panel C. (z)

  • Q : Which of the following lists includes

    Which of the following lists includes only capital resources (and therefore no labor or land resources)?

  • Q : Mixed economic resolves essential

    Why do some people think that a mixed economic system resolves essential economic problems?

  • Q : Determine average production cost by an

    When Robomatic Corporation maximizes profit in its production of RoboMaids, its average production cost per robot will be roughly: (1) $3,000 per robot. (2) $5,000 per robot. (3) $7,000 per robot. (4) $9,000 per robot. (5) $11,000 per robot.

  • Q : Problem on effect of a price decrease

    1. Is it possible for any country to have made gains in access (at the expense of quality) of their rural healthcare system, without any gains in efficiency?  Explain using a PPF diagram.2. If the own price elasticity for a good is -2.5, what is the l

  • Q : Present consumption and future

    When interest rate increases, the cost of future consumption decreases?