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Yield to Maturity Is Always Realized as Promised: A Reply

Author

Listed:
  • Cebula, Richard
  • Yang, Bill

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.

Suggested Citation

  • Cebula, Richard & Yang, Bill, 2008. "Yield to Maturity Is Always Realized as Promised: A Reply," MPRA Paper 54442, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:54442
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    File URL: https://mpra.ub.uni-muenchen.de/54442/1/MPRA_paper_54442.pdf
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    References listed on IDEAS

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    1. Cebula, Richard & Yang, Bill, 2007. "Yield to Maturity Is Always Received as Promised," MPRA Paper 53182, University Library of Munich, Germany.
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    More about this item

    Keywords

    yield to maturity; rate of return; yield curve;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G19 - Financial Economics - - General Financial Markets - - - Other
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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