Glossary Word Definition: Yield to Maturity
Yield to Maturity
The yield on a bond, taking into account the interest rate, the purchase price in relation to the par value and the number of years left to maturity. For example, if an investor purchases a $1,000 bond for $800, the $200 profit ($1,000 - $800) the owner will receive at maturity will be added to the interest earned when calculating yield to maturity.