Variants of yield to maturity
#bonds #finance #yield-to-maturity

As some bonds have different characteristics, there are some variants of YTM:

• Yield to call: when a bond is callable (can be repurchased by the issuer before the maturity), the market looks also to the Yield to call, which is the same calculation of the YTM, but assumes that the bond will be called, so the cashflow is shortened.
• Yield to put: same as yield to call, but when the bond holder has the option to sell the bond back to the issuer at a fixed price on specified date.
• Yield to worst: when a bond is callable, puttable, exchangeable, or has other features, the yield to worst is the lowest yield of yield to maturity, yield to call, yield to put, and others.
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Yield to maturity - Wikipedia, the free encyclopedia
bond's coupon rate is less than its YTM, then the bond is selling at a discount.If a bond's coupon rate is more than its YTM, then the bond is selling at a premium.If a bond's coupon rate is equal to its YTM, then the bond is selling at par. <span>Variants of yield to maturity As some bonds have different characteristics, there are some variants of YTM: Yield to call: when a bond is callable (can be repurchased by the issuer before the maturity), the market looks also to the Yield to call, which is the same calculation of the YTM, but assumes that the bond will be called, so the cashflow is shortened. Yield to put: same as yield to call, but when the bond holder has the option to sell the bond back to the issuer at a fixed price on specified date. Yield to worst: when a bond is callable, puttable, exchangeable, or has other features, the yield to worst is the lowest yield of yield to maturity, yield to call, yield to put, and others. Formula for yield to maturity for zero-coupon bonds Example 1 Consider a 30-year zero-coupon bond with a face value of \$100. If the bond is priced at an annual YTM of 10%, i