difference between YTM and return on bonds
In a mock question, we are asked to say if the global full life return on a bond will be equal, higher or lower than the YTM, if the spot curve stay the same during the full life of the bond.
The answer is :
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What i do not understand is that YTM is computed from the spot curve (actually it is a ”complex” mean of the spot curve that accounts for lower and higher rate on the spot curve), so if the spot curve did not change, shoudn’t it be the same to reinvest at the different forwards or at the unique YTM ?
Shoudn’t YTM of the bond be equal to the global return if the spot curve DO NOT MOVE ?
Thanks a lot !
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