[Answer] The stated yield to maturity and realized compound yield to maturity of a (default-free) zero-coupon bond will always be equal. Why?

Answer: Yield to maturity and realized compounded yield to maturity of a zero coupon bond are always equal because the coupon rates are reinvested at the rate of interest which is equal to the yield to maturity of the bond.

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The stated yield to maturity and realized compound yield to maturity of a (default-free) zero-coupon bond will always be equal. Why? Tue Feb 10 2004 · The yield to maturity is the IRR on the bond s cash flows: the purchase price the coupons received and the principal at maturity . The yield to call is the IRR on the bond s cash flows assuming it is called at the first opportunity instead of being held till maturity . The yield of a bond is inversely related to its price today: if the price ... Yield to maturity - Wikipedia ...

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