1.   Simply buy and hold good bonds until maturity.

2.   The current yield is used to estimate the cost of or profit from holding a bond.

3.   This increases the overall return from holding the bond.

4.   The yield to maturity is the most frequently used measure of the return from holding a bond.

5.   The most important of these is that it will almost certainly not equal the actual return from holding the bond even if the bond is held to maturity.

6.   The RHS gives the terminal value of the returns from holding the bond.

7.   Another disadvantage of yield to maturity is that investors do not typically hold bonds to maturity.

8.   Having discussed various ways of measuring the returns on bonds, the next step is to discuss different ways of measuring the risk from holding bonds.