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Bonds & Fixed Income

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Bonds & Fixed Income

Yield to Maturity

The total annualised return from holding a bond to maturity, accounting for coupons, the purchase price and the redemption amount.

Approximate YTM = [Annual Coupon + (Face Value - Price) / Years to Maturity] / [(Face Value + Price) / 2] %
Bonds & Fixed Income

Zero-Coupon Bond

A bond paying no periodic interest, issued at a discount and redeemed at face value.

Price = Face Value / (1 + Yield) raised to the number of years to maturity