DEFINITION of 'Yield To Average Life'

The yield on a fixed-income security when the average maturity is substituted for the maturity date of the issue. It is particularly useful when a bond has a sinking-fund feature, as average life in this case may be significantly less than the actual number of years until maturity.

BREAKING DOWN 'Yield To Average Life'

Yield to average life enables the investor to estimate the actual return from a bond investment, regardless of the actual maturity. The yield to average life calculation assumes that the bond matures on the day given by its average life and at the average redemption price instead of the par price.

  1. Current Maturity

    The interval between the present date and the maturity date of ...
  2. Term To Maturity

    In bonds, term to maturity is the time between when a bond is ...
  3. Maturity Date

    The maturity date is the date when the principal amount of a ...
  4. Average Effective Maturity

    For a single bond, it is a measure of maturity that takes into ...
  5. Realized Yield

    Realized yield is the actual amount of return earned on a security ...
  6. Maturity

    Maturity refers to a finite time period at the end of which the ...
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