{"id":36705,"date":"2024-05-30T09:41:42","date_gmt":"2024-05-30T09:41:42","guid":{"rendered":"https:\/\/www.greatassignmenthelp.com\/questions\/?p=36705"},"modified":"2024-05-30T09:41:42","modified_gmt":"2024-05-30T09:41:42","slug":"all-else-constant-a-bond-will-sell-at-_____-when-the-yield-to-maturity-is-_____-the-coupon-rate","status":"publish","type":"post","link":"https:\/\/www.greatassignmenthelp.com\/questions\/all-else-constant-a-bond-will-sell-at-_____-when-the-yield-to-maturity-is-_____-the-coupon-rate\/","title":{"rendered":"All else constant, a bond will sell at _____ when the yield to maturity is _____ the coupon rate."},"content":{"rendered":"

All else constant, a bond will sell at _____ when the yield to maturity is _____ the coupon rate.<\/p>\n

A. a premium; greater than<\/p>\n

B. a premium; equal to<\/p>\n

C. at par; greater than<\/p>\n

D. at par, less than<\/p>\n

E. a discount; greater than<\/p>\n

Answer: E. a discount; greater than<\/strong><\/p>\n

<\/a> Low interest rates in the environment and a bond yield that is higher than the coupon rate are amongst the conditions that would make bonds to be sold at a discount. Yield to maturity is the calculated or anticipated rate of return of that bond if the bond were held till the bond\u2019s ripe old age. Based on the above yield, if it is above the coupon rate- the usual interest received by the bondholder then the current market price is a lower position than the bond\u2019s face value\/par value. The holders can easily accept a price that is less than the par value of the bond considering the fact that the YTM gives such great reward as compared to the coupon rate on the bond. Thus, if the yield to Maturity is greater than the coupon rate it means that the bond is sold at lower than its face value hence the investors end up with high return for they have bought the bond at a cheaper price than the par value.<\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

All else constant, a bond will sell at _____ when the yield to maturity is _____ the coupon rate. A. a premium; greater than B. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"\nAll else constant, a bond will sell at _____ when the yield to maturity is _____ the coupon rate.<\/title>\n<meta name=\"description\" content=\"All else constant, a bond will sell at _____ when the yield to maturity is _____ the coupon rate. 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