Yield to Maturity Is Always Realized as Promised: A Reply

Cebula, Richard and Yang, Bill (2008): Yield to Maturity Is Always Realized as Promised: A Reply. Published in: Journal of Economics and Finance Education , Vol. 8, No. 2 (28 February 2009): pp. 38-41.

Abstract

This note attempts to further elaborate why it is a myth that YTM is viewed as only a promised but not really earned interest rate. It addresses some misconceptions regarding what, between YTM and RCY, is a true rate of return of a coupon bond, why YTM is NOT just a “fictitious mathematical construct”, and why YTM has nothing to do with yield curve.

• Item Type: MPRA Paper
• Language: English
• Keywords: yield to maturity; rate of return; yield curve
• Subjects: G - Financial Economics > G1 - General Financial Markets > G12 - Asset Pricing ; Trading Volume ; Bond Interest Rates; G - Financial Economics > G1 - General Financial Markets > G19 - Other; G - Financial Economics > G3 - Corporate Finance and Governance > G30 - General

References

Cebula, R.J., and B.Z. Yang. 2008. “Yield to Maturity Is Always Received as Promised.” Journal of Economics and Finance Education, pp. 43-47.

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