How to Calculate Coupon Yield to Maturity: A Step-by-Step Guide for Investors

How to Calculate Coupon Yield to Maturity: A Step-by-Step Guide for Investors

Coupon yield to maturity is the annual rate of return an investor can expect to receive from a coupon-paying bond if held until its maturity date. For example, a bond with a face value of $1,000, a 5% coupon rate, and a 10-year maturity would have a coupon yield to maturity of 5%.

Coupon yield to maturity is an important metric for investors to consider when making investment decisions, as it provides a way to compare the yields of different bonds. It is also used as a benchmark to measure the performance of other fixed income investments.

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