SHORT ANSWER
The core idea
Yield to maturity incorporates the bond's current price, coupon payments and repayment at maturity, while the coupon rate only states the contractual coupon relative to face value.
THE MECHANISM
What is happening underneath
When a bond trades away from par, its YTM generally differs from its coupon rate.
MARKET INTERPRETATION
How investors should read it
YTM is therefore more useful for comparing market returns across fixed-rate bonds.
BONDSTATS TAKEAWAY
The same market move can carry different information depending on which maturity, issuer and risk premium is changing. Read the question together with the underlying concepts rather than treating one price move as a universal signal.
RELATED CONCEPTS
← Browse all Bond Market Questions