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Even though the yield-to-maturity for the remaining life of the bond is just 7%, and the yield-to-maturity bargained for when the bond was purchased was only 10%, the annualized return earned over the first 10 years is 16.25%. This can be found by evaluating (1+i) from the equation (1+i) 10 = (25.84/5.73), giving 0.1625.
YTM of course is not the "nominal yield" (the technical term) but it is nominal in the sense that it is formulated from the nominal rate with no risk factors. My edit was to amplify your proper point about YTM ignoring risk factors (thank you for that), which is to say, YTM is nominal and not real-world.
It applies a discount rate for borrowing cash, and the IRR is calculated for the investment cash flows. This applies in real life for example when a customer makes a deposit before a specific machine is built. When a project has multiple IRRs it may be more convenient to compute the IRR of the project with the benefits reinvested. [14]
For example, if you’ve already set aside $25,000 in a savings account, you could open a six-month CD with an annual percentage yield (APY) of 4.50 percent and withdraw $556.31 in interest ...
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YTM may also refer to: A US Navy hull classification symbol: Medium harbor tug (YTM) YTM, the International Air Transport Association airport code for Rivière Rouge – Mont Tremblant International Airport , Canada
In the days after UnitedHealthcare CEO Brian Thompson was gunned down in New York City, many social media users took it upon themselves to try to solve the mystery of who killed him — and why.
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