What is Yield to Maturity (YTM)?
YTM is the total return anticipated on a bond if held until maturity — accounting for coupon payments, face value, purchase price, and time remaining.
Formula
YTM solves: Bond Price = Σ [Coupon/(1+YTM)^t] + Face Value/(1+YTM)^n
How to Interpret
YTM is the most complete measure of bond return. Higher YTM means higher expected return but typically also higher risk.
Typical Ranges
Government bonds: 6-8% in India. Corporate bonds: 8-12% depending on rating.