Interest rates & bond valuation; stock valuation
Understanding YTM is a great way for investors to decide whether buying certain bonds is worth it. It takes into consideration any possible gains and losses due to fluctuations in interest rates throughout the investment period. The concept applies to reissuing bonds and determining cash flow requirements in order to reach their financial objectives. When assessing bonds’ values, it is important to consider market fluctuations and other risk factors before taking any decision.