#bonds #finance #yield-to-maturity
for zero coupon bonds
, the yield to maturity and the rate of return are equivalent since there are no coupon payments to reinvest.
it is dubious. YTM is not about reinvesting coupons
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Yield to Maturityng period return, as the two often differ. Yield to maturity is generally given in terms of Annual Percentage Rate (APR), and it is an estimation of future return, as the rate at which coupon payments can be reinvested at is unknown. However, <span>for zero coupon bonds, the yield to maturity and the rate of return are equivalent since there are no coupon payments to reinvest.
Another way of putting it is that the yield to maturity is the rate of return that makes the present value (PV) of the cash flow generated by the bond equal to the price. Yield to maturi
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