Yield to Maturity
Yield to maturity (YTM) is the internal rate of return of a bond. In calculating YTM, coupon income, redemption value, interest earned on interest, as well as the timing of each cash flow, are all taken into account from settlement to maturity. All intermediate cash flows are reinvested at the YTM itself. The YTM may only be realized when the bond is held to maturity and all cash flows are reinvested at exactly the YTM rate.