Narutorcjy

A bond's yield is the return an investor realizes on a bond in percentage terms If a bond pays more than one cash flow (coupon), then there is no direct formula which can be used to calculate the bond's yield Instead, an iterative approach is used This is referred to as the yield to maturity (YTM)The settlement date is the date a buyer purchases a coupon, such as a bond The maturity date is the date when a coupon expires For example, suppose a 30year bond is issued on January 1, 08, and is purchased by a buyer six months laterLet us find the yieldtomaturity of a 5 year 6% coupon bond that is currently priced at $850 The calculation of YTM is shown below Note that the actual YTM in this example is 987% Free Bond Valuation Yield To Maturity Spreadsheet Yield to maturity for coupon bond formula semi annual