medium · Debt Capital Markets
If a bond is trading at 102.00 and its call price is 102.00, why might the YTW still be lower than the coupon rate?
- Because the bond is likely to be put by the investor.
- Because the market expects interest rates to rise.
- Because the YTM (which factors in a pull to par at 100.00) is lower than the coupon.
- Because the YTC factors in the loss of the 2-point premium.
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