Whether timimg of cash flow is a n important part of YTM?

CFA Level I
#1

Whether timimg of cash flow is a n important part of YTM? What we know about YTM are+ assume to hold to maturity, reinvest the coupon at YTM, but how about timing if cash flow, I thought YTM should have no relationship to determine the coupon income, right? Thanks again in advance!

#2

say I buy a zero-coupon bond today for $10, and in 5 years I sell it for $20. Two cash flows. What’s the YTM? Now say I sell it in 6 years instead of 5 (but still for $20). Did the YTM change? You can throw in intermediate coupons. You should still end up convincing yourself that the same cash flow amounts, with different timings, gives you different YTMs.

#3

I got it and many thanks!

#4

Same question…so which is not an important part of YTM? A. Determine coupon income B. Assume to hold to maturity C. Reinvest the coupon pmt at YTM D. Timing of the cash flow. Will A be the answer?

#5

Up

#6

maggiew Wrote: ------------------------------------------------------- > Same question…so which is not an important part > of YTM? > A. Determine coupon income > B. Assume to hold to maturity > C. Reinvest the coupon pmt at YTM > D. Timing of the cash flow. > > Will A be the answer? Yes.