Yield to Maturity Assuming Coupons Reinvested


 
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Yield to Maturity Assuming Coupons Reinvested
Robert Fullsome, Accountant, United States

I'm confused by the last segment of the explanation where it says the YTM rate assumes that coupons are reinvested at the YTM rate. My question is somewhat inconsequential since if the coupons are reinvested at the YTM rate, they won't affect the yield to maturity. But the YTM calculation is essentially an IRR calculation. And the IRR calculation never assumes cash flows are reinvested. They are simply used to calculate the IRR. .
 

 















 

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