Practice mode Finance

If a bond sells at a discount, which relationship holds true?

Correct answer A. Bond Price < Par Value and YTM > coupon rate

Explanation

A bond trades below par when investors require a yield higher than its coupon rate, so the price falls until the yield to maturity exceeds the coupon.

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If a bond sells at a discount, which relationship holds true?

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If a bond sells at a discount, which relationship holds true?

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