Abstract
This note addresses a common misconception, found in investment texts and popular investment education literature, that in order to earn the yield to maturity on a coupon bond an investor must reinvest the coupon payments. We identify a sample of text and professional sources making this claim, demonstrate that yield to maturity entails no assumption of coupon reinvestment, discuss a cause for this confusion and offer a possible remedy.
Recommended Citation
(2026)
"Yield-to-Maturity and the Reinvestment of Coupon Payments,"
Journal of Economics and Finance Education: Vol. 7:
Iss.
1, Article 7.
Available at:
https://scholarship.rollins.edu/jefe/vol7/iss1/7
