Asked by
Marvin Omoding
on Oct 20, 2024
Verified
If the coupon rate on a bond is 4.5% and the bond is selling at a premium, which of the following is the most likely yield to maturity on the bond?
A) 4.3%
B) 4.5%
C) 5.2%
D) 5.5%
Yield to Maturity
The total return anticipated on a bond if it is held until the maturity date, factoring in the current price, par value, coupon yield, and time to maturity.
Coupon Rate
Each year, the interest rate a bond yields, expressed in terms of the percentage of its face value.
Premium
A premium is the amount by which the price of a security or financial instrument exceeds its intrinsic or face value.
- Attain a comprehensive understanding of the principles of yield to maturity (YTM) and yield to call (YTC), along with their influencing determinants.
Verified Answer
BW
Learning Objectives
- Attain a comprehensive understanding of the principles of yield to maturity (YTM) and yield to call (YTC), along with their influencing determinants.