Yield to Call
Definition
What is Yield to Call?
The annualised returnA return converted into an equivalent yearly rate to make periods easier to compare. implied if a callable bondA bond the issuer may redeem before maturity under specified terms. is redeemed on a specified call date.
Example in practice
How This Looks in Practice
An investorA person or organisation that commits capital with the expectation of a financial return. compares yield to call with yield to maturityThe annualised return implied by a bond's price if held to maturity and all promised payments occur and are reinvested as assumed. before buying a callable bond.
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Related Terms
Bond
A debt security through which an investor lends money to an issuer in return for promised payments.
Fixed IncomeIssuer
The government, company, or organisation that creates and sells a security.
Fixed IncomeFace Value
The principal amount stated on a bond and usually repaid at maturity.
Money MarketsTreasury Bill
A short-term government debt instrument usually issued at a discount and repaid at face value.