SIE Exam Practice Question 603
Question: 603
When a bond is selling at a premium to par, the yield to maturity (YTM) will always be __________ the bond's coupon rate. If a bond is selling at a discount to par, the YTM will always be __________ the bond's coupon rate.
Correct Answer: D
Explanation:
When a bond is selling at a premium to par, the yield to maturity (YTM) will always be less than the bond's coupon rate. If a bond is selling at a discount to par, the YTM will always be greater than the bond's coupon rate.
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