Skip to main content
No. of Recommendations: 1
"The bond's issue date was 12/10/08; it's maturity date is 12/9/2011. It's coupon rate is 3.00%

They show the current price as being $103.945 with a "Current Yield" of 2.886% I assume that means: $3.00 earnings / $103.945 cost = 2.886% yield

Then they show a "Yield to Maturity" of 0.297%
I cannot figure out how this is calculated nor what it actually means. "


I'll try.

At maturity, you will receive $1000 for which you paid $1039.45 - a loss of $39.45.
You will have received interest of roughly $45 (you will own it for about a year and a half).
So your net is about 5.55 over 18 months on an investment of 1039.45.
That works out to about .03% (very rough calculations - I don't have my spreadsheet handy) but seems like it's in the ball park of what they are showing.

Regards,
Les
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.