Yield to maturity (YTM)

Yield to maturity is the percentage rate of return paid on a bond, note, or other fixed income security if the investor buys and holds it to its maturity date. The calculation for YTM is based on the coupon rate, length of time to maturity, and market price. It assumes that coupon interest paid over the life of the bond will be reinvested at the same rate.

Put in simply, Yield to maturity is the rate of return (%) that you would earn if you bought a bond today and held it until the bond matured.