RT Journal Article
SR Electronic
T1 Adjusting Current Yield to be a Better<br/>Approximation of Yield to Maturity
JF The Journal of Wealth Management
FD Institutional Investor Journals
SP 31
OP 33
DO 10.3905/jwm.2014.17.2.031
VO 17
IS 2
A1 Tom Arnold
A1 John H. Earl
YR 2014
UL https://pm-research.com/content/17/2/31.abstract
AB Current yield is a common approximation for abond’s yield to maturity. The approximation becomes less accurate as the bond price moves away from par value. By performing a relatively easy calculation that incorporates an annuity calculation with the coupon rate, an adjustment to current yield can be generated that is a much better approximation of the actual yield to maturity.TOPICS: Fixed income and structured finance, performance measurement