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How is Yield to Maturity (YTM) different from Annual Percentage Yield (APY)?
The APY (Annual Percentage Yield) represents the earnings on an interest-bearing time deposit account in a year, expressed as a percentage. Yield to Maturity is the rate of return on a T-bill investment, assuming the position is held until maturity.
The APY (Annual Percentage Yield) represents the earnings on an interest-bearing time deposit account in a year, expressed as a percentage.
Yield to Maturity is the rate of return on a T-bill investment, assuming the position is held until maturity. It takes into account the price paid and the holding period of the investment, and it shows the rate of return as an annualized rate.