Yield-to-Maturity (IRR)

The YTM of asset $//<![CDATA[ \begin{array}{l}i\end{array} //]]>$ is computed using the price obtained on each valuation date so that:

$$//<![CDATA[ \begin{array}{l}\displaystyle P_{i,t}=\sum_{t=1}^T \frac{CF_t}{(1+r_{i,t})^t}\end{array} //]]>$$

with   $//<![CDATA[ \begin{array}{l}P_t\end{array} //]]>$ the price of asset  $//<![CDATA[ \begin{array}{l}i\end{array} //]]>$ at time   $//<![CDATA[ \begin{array}{l}t\end{array} //]]>$,  $//<![CDATA[ \begin{array}{l}CF_1\dots CF_T\end{array} //]]>$ the stream of future payouts, and  $//<![CDATA[ \begin{array}{l}YTM_{i,t}\end{array} //]]>$ the yield-to-maturity or IRR rate for asset  $//<![CDATA[ \begin{array}{l}i\end{array} //]]>$ at time  $//<![CDATA[ \begin{array}{l}t\end{array} //]]>$.