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6 April, 20:46

Is it better for bondholders when the yield to maturity increases or decreases? Bondholders are better off when the yield to maturity:

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  1. 6 April, 21:40
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    decreases

    Explanation:

    The yield to maturity is not the same as a bond's current yield. The yield to maturity is the expected return for a bond if the investor decides to hold the bond until it matures. When the bond's price decreases, the yield to maturity increases, and vice-versa. A decrease in the yield to maturity not only implies a higher bond price but it also represents a decrease in potential capital losses.
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