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Read the fitted-rate equation
For a fixed promised schedule, YTM solves P = Σ CFt/(1+y)^t under a specified convention. The price may already have been constructed using a nonflat spot curve. Solving for y compresses that dated valuation into one internal rate.
Notice which dates receive more value
Two same-maturity bonds can allocate their payments differently. A high coupon places more receipts before maturity; a zero places everything at maturity. On a nonflat curve, the two schedules need not have the same fitted yield.
| Instrument | Earlier payments | Final payment |
|---|---|---|
| Three-year zero | None | 100 |
| Three-year annual 5-coupon bond | 5 in years one and two | 105 |
Inspect the zero-coupon case
For one payment at year three, fitting a three-year YTM to its price simply recovers the corresponding three-year spot rate on the same basis. That special equality does not extend automatically to every coupon bond.
Avoid a market-quality claim from yield alone
A larger single yield can reflect schedule, risk, liquidity or quotation differences. This page explains the schedule effect within a supplied curve, not a claim that a higher-yield bond is a superior investment.