{"id":250514,"date":"2024-07-14T00:00:24","date_gmt":"2024-07-14T00:00:24","guid":{"rendered":"https:\/\/namso-gen.co\/blog\/?p=250514"},"modified":"2024-07-14T00:00:24","modified_gmt":"2024-07-14T00:00:24","slug":"do-you-use-price-or-value-in-ytm","status":"publish","type":"post","link":"https:\/\/namso-gen.co\/blog\/do-you-use-price-or-value-in-ytm\/","title":{"rendered":"Do you use price or value in YTM?"},"content":{"rendered":"

The yield to maturity (YTM) is an important metric used by investors to assess the return they can expect from a fixed-income investment, such as bonds. It represents the total return anticipated if the bond is held until maturity, considering both interest payments and any capital gains or losses upon maturity.<\/p>\n

However, a question often arises among investors: Do you use price or value in YTM? In other words, should YTM be calculated based on the bond’s current price or its fundamental value?<\/p>\n

To answer this question directly: **YTM calculations are based on bond prices, not their fundamental values**. The YTM represents the return an investor can expect based on the bond’s market price at a particular moment.<\/p>\n

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