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YTM VS Spot Rates

I know that it is a lame question for some of you, but I feel that I do not grasp the difference between YTM vs Spot Rates 100%. This is what I understand,

1. YTM is like IRR, it is a calculated rate which flattens the yield along the tenor of the bond, and it indicates the total % yielded when holding a bond till maturity.

does it differ along the years??

2. Spot Rates are the rates that you receive every year, it differ from one year to the other. Spot rates are determined based on the rates in the market.

Is this explanation correct!!

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I wrote an article on par rates, spot rates, and forward rates: http://finexamhelp123.wpengine.com/par-curve-spot-curve-and-forward-curve/.  It’s one of the free samples on my website.

(Full disclosure: as of 4/25/16, there is a charge to read the articles on my website.  You can get an idea of the quality of the articles by looking at the free samples here: http://www.financialexamhelp123.com/sample-articles/.)

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Read S2000’s writeup. It’s infinitely better than the explanation I was typing, and helped confirm my understanding as well.

The article is really helpful, but still I’m confused at one point, I will recape what I have understood and I need guidance please.

The YTM, is a formulated single discount rate (similar to the IRR) to discount all cash flows from a bond.

It is like a loan that has a flat rate and a declining rate, the YTM is like the flat rate.

If I understood it correctly, why is different YTM at a different periods of time.

Spot curve, is the the rate curve that discounts each cash flow based on its maturity to today’s rate

Forward curve, is similar to the spot curve with the only difference that it discount the cash flows one period ahead. For example, to discount a four year year maturity bond, it will be discounted to T=1.

Failure will never overtake me if my determination to succeed is strong enough!

The difference is in the coupons and timeframe.

Spot = special YTM (0 coupon)

Forward = predicted spot