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      Question

      YTM of a Bond is not affected

      by
      A Coupon Rate Correct Answer Incorrect Answer
      B Issue Price Correct Answer Incorrect Answer
      C Redemption Value Correct Answer Incorrect Answer
      D Interest amount Correct Answer Incorrect Answer
      E None of the above Correct Answer Incorrect Answer

      Solution

      The YTM or yield to maturity is unaffected by the issue price of a bond. YTM can be estimated as (Interest amount + (Redemption Value- Market Price)/N)/(average of redemption value and market price of bond). As such interest amount, coupon rate (that helps to calculate the interest amount) and redemption value would affect the YTM; however, issue price does not affect the YTM.

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