If the coupon rate on a bond is higher than the yield to maturity, a. the bond sells at a discount. b. the coupon rate on the bond has decreased. c. interest rates have probably increased since the bond was issued. d. the current yield on the bond is lower now than when the bond was originally issued.
Added by Paul S.
Step 1
The coupon rate is the fixed annual interest rate that the bond issuer pays to the bondholder. Yield to maturity, on the other hand, is the total return anticipated on a bond if it is held until it matures. Now, if the coupon rate on a bond is higher than the Show more…
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