easy · Principles of Finance valuation
If a bond is trading at a discount (price below par), what is the relationship between its coupon rate and its yield to maturity (YTM)?
- The coupon rate is higher than the YTM.
- The YTM and coupon rate are equal.
- The YTM is exactly half of the coupon rate.
- The YTM is higher than the coupon rate.
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