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what is the formula of yield to maturity. Current yield by definition is the annual rate of return that you receive for the price paid for that bond. Yield to maturity YTM is the total expected return for an investor if the bond is held to maturity.
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For an approximate appraisal of yield to maturity the following formula can be used. The yield to maturity YTM is the percentage rate of return for a bond assuming that the investor holds the asset until its maturity date. However this is rarely the case.
Par Value Price Yield to Maturity Current Yield.
Yield to Maturity Formula refers to the formula that is used in order to calculate total return which is anticipated on the bond in case the same is held till its maturity and as per the formula Yield to Maturity is calculated by subtracting the present value of security from face value of security divide them by number of years for maturity and add them with coupon payment and after that dividing the resultant with sum of present value of security and face value of security divided by 2. Approx Yield to Maturity C F-P n FP 2 150 1500 1200 10 1500 1200 2 1333. Discount Price Yield to Maturity Current Yield. Y T M Face Value Current Price n 1 where.
