Question
A bond is trading at a premium. What does that say about its YTM relative to its coupon rate? YTM < Coupon Rate YTM =
A bond is trading at a premium. What does that say about its YTM relative to its coupon rate?
- YTM < Coupon Rate
- YTM = Coupon Rate
- YTM >Coupon Rate
Two bonds are rated B+ and BB−. Which would you expect to have the higher yield?
- B+ bond
- BB- bond
- They are the same
A company just issued an unexpected poor earnings report, throwing into doubt their ability to continue their debt payments. What should happen to the price of their bonds?
- They should go down
- They should go up
- They should stay the same
Step by Step Solution
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Step: 1
1YTM Coupon Rate The yield to maturity YTM is the rate of return ex...
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
Concise 6th Edition
324664559, 978-0324664553
